Advertiser Disclosure

🎁 Get a free credit card reader from Square today!

How Does Square’s Instant Deposit Work?

  • 22 comments
  • Updated on:
Advertiser Disclosure: Our unbiased reviews and content are supported in part by affiliate partnerships, and we adhere to strict guidelines to preserve editorial integrity.
Melissa Johnson

Melissa Johnson

Melissa Johnson has been writing about payment processing and mobile payments since 2014, and has been quoted in articles for Credit Karma and The Next Web, among others. She graduated from The University of Kansas in 2010 with bachelor's degrees in English and journalism.

We've done in-depth research on each and confidently recommend them.

We've done in-depth research on each and confidently recommend them.

Leave a comment

22 Comments

Responses are not provided or commissioned by the vendor or bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the vendor or bank advertiser. It is not the vendor or bank advertiser's responsibility to ensure all posts and/or questions are answered.

    Greg Wiest

    Could one use a square to take payment for multiple venders and then transfer the money to multiple venders accounts. The example is a non profit art gallery where the payment needs to go directly to the artists rather then a common bank account. Any ideas?

      Jessica Dinsmore

      Hi Greg!
      Unfortunately, there’s not a great solution to this yet. That kind of payment structure can’t be automated within a mobile POS. You could try using Square’s payroll feature to pay out artists as contractors. This’ll cost you $5/month per payee, and you’ll need to configure your inventory and reporting so that you can easily see who is owed what based on sales. My suggestion would be to set up each artist as a category and enter the artists works’ under that category.

      The other option would be to do something similar in PayPal using the Mass Payout feature. Again, you’ll need to configure the mobile POS app inventory to accommodate your structure and run reports, but then you can do a mass payout for a small fee. (either uploading a spreadsheet or using an API)

      Alternatively, you could look at Stripe and maybe WePay, which both offer pretty solid tools for building a platform like that. PayPal might also have the capability but it’s tools for this sort of feature are still pretty new. Good luck!

        Chuck

        Sounds like you’re asking about multi-merchant capability which Square and First Data’s Clover Go both support (along with any multi-merchant capable terminal). A multi-merchant setup basically allows you to take payments and deposit into multiple business accounts by setting up multiple accounts all processing on one device or app.

          PG285

          Hi Melissa, thanks for the article!

          Credit card settlement takes 24-48 hours. How is Square able to transfer those funds instantly (even Square hasn’t received those funds from the issuing banks)?

          Also, what is the fee for same-day transfer? Is it cheaper than 1% of the amount (as it is for instant deposit)?

          Thanks.

            This comment refers to an earlier version of this post and may be outdated.

            Emily Hale

            Hi and thanks for your message! Square covers the transfer that hasn’t been funded on the back-end because it’s large enough to, essentially. Not all merchant account providers offer the same convenience. While Square does take somewhat of a risk in doing so, the merchant is charged from a linked bank account should the transaction face a chargeback. So while it’s a risk, the financial liability of a chargeback is on the merchant, no matter what provider you have. As far as the fee for same-day transfers, the instant deposit and same-day transfer (despite the different terminology) cost the same with the same expectations of fund time transfer. However, if you have the Square Card (as mentioned in the post), you can use your funds immediately. You can apply for a business card right at your dashboard if you already use Square, and it costs nothing to do so. Hope this helps and best of luck!

              This comment refers to an earlier version of this post and may be outdated.

              We've done in-depth research on each and confidently recommend them.

              Sheldon G

              Do you know if Square allows apps to use their API for your own app to allow end-users (clients) to send payments directly to your sub-merchants (barbers/stylists/etc) rather than requiring you to be a middle-person and delay the receipt of their payment?

                This comment refers to an earlier version of this post and may be outdated.

                Jessica Dinsmore

                Hi Sheldon!

                As far as we are aware, Square doesn’t currently support onboarding of users as sub-merchants or any other marketplace-like setups, and there’s nothing mentioned in the documentation. You would be best reaching out to Square directly to confirm. If you’re looking for alternatives, Braintree and Stripe might be up your alley.

                  This comment refers to an earlier version of this post and may be outdated.

                  Ashley R Williams

                  Hello
                  My name is Ashley, I took my first payment before my debit card was linked. It says my card is li le now, but does that mean I can use it to spend my square balance?

                    This comment refers to an earlier version of this post and may be outdated.

                    Jessica Dinsmore

                    Hi Ashley!

                    Once your bank account is linked, Square will start transferring funds to the account automatically (by default Square takes 1-2 business days to deposit funds depending on when the transaction is processed). If you order the Square Card (which is not the same as linking your bank account/debit card to Square), Square will start accumulating your Square Balance and once the card arrives you can spend it anywhere that accepts MasterCard. I hope that answers your question!

                      This comment refers to an earlier version of this post and may be outdated.

                      Gerrit Lettinga

                      I just bought a square reader for $49 in nanaimo bc Canada at best buy. How do I know when someone pays me on the app on my mobile phone, that the person actually has the funds in his or her bank account, just to make sure the person didn’t write me a rubber cheque. The box says all debit cards only charge $.10 if it less than $100. I don’t want to get scammed by dishonest people. If it takes 2 business days to appear in my bank account, could this person have the money in his account at the point of sale and then shortly thereafter take the money out of his account, so that I wouldn’t receive the money? I have 90 days to return this to the store. Can I get ripped off?

                        This comment refers to an earlier version of this post and may be outdated.

                        Jessica Dinsmore

                        Hi Gerrit,

                        Square should be able to tell you right away if a transaction has been approved or declined. You may want to check out our in-depth Payment Processing Guide to learn a bit more about how processing works. I hope that helps!

                          This comment refers to an earlier version of this post and may be outdated.

                          Mark Damon

                          I made a sale and now it just says sending and i just changed my bank account. How long will it take to recieve my money. It has been saying sending for 2 days. Plus they stll are reviewing my my instant deposit. Why?

                            This comment refers to an earlier version of this post and may be outdated.

                            Jessica Dinsmore

                            Hi Mark,

                            Hopefully your issue has been resolved by now, but if not, I can say that the first deposit usually takes the longest. I’d definitely suggest reaching out to Square directly for any future delays. Thanks for your question and best of luck!

                              This comment refers to an earlier version of this post and may be outdated.

                              Kevin

                              but… HOW do they do it? pre-funded funds??? running a RETURN credit card/debit card transaction still pends on the merchant to cardholder business transaction. if Square is only utilizing your DEBIT card information.. (i can see if there were WIRING information .. but I never gave my account information for incoming WIRE…. how do they get special faster treatment to access an increase in my available funds in my bank so quick?

                                This comment refers to an earlier version of this post and may be outdated.

                                Jessica Dinsmore

                                Hi Kevin!

                                Square uses your debit card number and same-day ACH transfers to provide its Instant Deposit service (your debit card is linked to your bank). It’s not a wire transfer. Standard ACH transactions take anywhere between 3-5 days to pay out, normally, but the infrastructure for instant transfers does exist. It’s just not the default option yet. I hope that helps clear things up for you! Best of luck!

                                  This comment refers to an earlier version of this post and may be outdated.

                                  We've done in-depth testing of each and confidently recommend them.

                                  John

                                  Can people “bounce” cash app payments for insufficient funds? Can people close their bank account or take out thier money before it arrives in your bank account?

                                    This comment refers to an earlier version of this post and may be outdated.

                                    Jessica Dinsmore

                                    Hi John,

                                    To be honest, this isn’t something we’ve ever encountered before, so it may be a bit outside of our expertise. I’d rather not give you an answer that I’m not too certain about, so I’d suggest reaching out to Square directly; they should be able to answer both questions quickly and easily.

                                      This comment refers to an earlier version of this post and may be outdated.

                                      Will

                                      Hey Melissa I recently opened my account with square and set up scheduled deposit for close of day at 2pm. So say if i got 2 or 3 deposits for 2,500 at 1:55 pm will they be available to me 15 minutes after the close of day time still?

                                        This comment refers to an earlier version of this post and may be outdated.

                                        Melissa Johnson

                                        Hi, William!

                                        Unfortunately, there’s a lot of information I don’t have about your account, nor am I a Square employee. So I can’t tell you anything definitively. I can, however, say this with confidence: if you accept multiple payments at 1:55 p.m. that total $2,500, yes, you should be able to move them to your bank account 15 minutes after close of day (so 2:15 p.m.). You’re going to pay 1% of the sum transferred — so $25 on a $2500 transfer. Also, if any single payment exceeds $2,500, you can’t send it via Instant or Scheduled deposit at all, and if your total daily amount exceeds $2,500, it’ll be sent in multiple deposits.

                                        I also need to caution you that any suspicious looking activity — a bunch of last-minute, high-volume transactions right before close of day, for example — could trigger a red flag with Square and lead them to freeze those funds while they investigate your account (which, in turn, could lead to an account termination and those funds being locked up for up to 180 days). Square also puts limits on new sellers using Instant Deposit. It doesn’t mention the same limitation on new sellers using Scheduled Deposit, but since it’s the same technology powering both deposit options, it’s worth taking note of.

                                        If you have questions about deposits and when funds are available, you should go directly to Square. They’re best equipped to help you, since they’ll have you account information!

                                        Hope that helps!

                                          This comment refers to an earlier version of this post and may be outdated.

                                          Jim Shanahan

                                          Good article Melissa! Do you happen to know how the Square Cash service works behind the scenes?
                                          For example, does Square receive the senders payment on the ether debit card through the MasterCard/Visa network as if they are a retailer? If so, do they need to pay an interchange fee of about 2% to the senders bank since it is a card not-present transaction?
                                          And on the receiving end, is it process via ACH or perhaps a credit to the receivers debit card account even tight its not refund.
                                          Thanks!
                                          Jim Shanahan

                                            This comment refers to an earlier version of this post and may be outdated.

                                            CAROLYN LEAR

                                            What if I closed my account and open up a new account with a different account number and debit card how do I register my new account

                                              This comment refers to an earlier version of this post and may be outdated.

                                              Melissa Johnson

                                              Hi, Carolyn!

                                              Information can be found here for changing your bank account in Square.

                                              https://squareup.com/help/us/en/article/3896-link-and-edit-your-bank-account#editing-your-bank-account-information

                                                This comment refers to an earlier version of this post and may be outdated.

                                              Leave a Reply

                                              Your email address will not be published. Required fields are marked *

                                              Your Review

                                              Comment moderation is enabled. Your comment may take some time to appear.
                                              Please read the "User Review and Comment Policy" before posting.

                                              Share

                                              Featured Offer: We Recommend QuickBooks 🎉

                                              Get 50% QuickBooks Online for a limited time!

                                              Take it for a spin with a free trial.

                                              Try QuickBooks Today

                                              We Recommend Fattmerchant 🏆

                                              Fattmerchant is one of our top picks for credit card processing!

                                               

                                               

                                              We love Fattmerchant's predictable pricing and excellent service.

                                              Get Started With Fattmerchant

                                              Get started with no commitment today.

                                              We Recommend Brex Corporate Card for Startups 🏆

                                              Brex Corporate Card for Startups is one of our top picks for business credit cards!

                                               

                                               

                                              For a limited time get 50,000 rewards points when you spend $1000 with Brex.

                                              Get Started With Brex Corporate Card for Startups

                                              Get started with no commitment today.

                                              We Recommend PaymentCloud 🏆

                                              PaymentCloud is one of our top picks for credit card processing!

                                               

                                               

                                              We love PaymentCloud's predictable pricing and excellent service.

                                              Get Started With PaymentCloud

                                              Get started with no commitment today.

                                              We Recommend National Processing 🏆

                                              National Processing is one of our top picks for credit card processing and POS!

                                               

                                               

                                              National Processing meets our high standards for credit card processing and is our preferred provider for Clover POS, among other POS systems. Get a quote today!

                                              Get Started With National Processing

                                              Get started with no commitment today.

                                              ⭐️ Featured Promo! ⭐️

                                              Sign up now and qualify for a limited time deal!

                                              Standard Plan: One month free ($29.95 value)
                                              Plus Plan: Two months free ($159.90 value)
                                              Pro Plan: Three months free ($899.85 value)

                                              Learn More

                                              At BigCommerce

                                              We Recommend PaymentCloud 🏆

                                              PaymentCloud is one of our top picks for credit card processing!

                                               

                                               

                                              We love PaymentCloud's predictable pricing and excellent service.

                                              Get Started With PaymentCloud

                                              Get started with no commitment today.

                                              We Recommend National Processing 🏆

                                              National Processing is one of our top picks for credit card processing and POS!

                                               

                                               

                                              National Processing meets our high standards for credit card processing and is our preferred provider for Clover POS, among other POS systems. Get a quote today!

                                              Get Started With National Processing

                                              Get started with no commitment today.

                                              Get 60% Off FreshBooks ✨

                                              FreshBooks is offering 60% off of their accounting and invoicing software for six months to help support businesses during COVID-19.

                                              Start For Free

                                              At FreshBooks

                                              We Recommend ShopKeep POS 🏆

                                              ShopKeep POS is one of our top picks for Point of Sale software!

                                               

                                               

                                              ShopKeep is offering free eCommerce tools and free online ordering for all existing and new customers for the next 3 months!

                                              Get Started With ShopKeep POS

                                              Get started with no commitment today.

                                              We Recommend Stamps.com 🏆

                                              Stamps.com is one of our top picks for shipping software!

                                               

                                               

                                              Start a 4-week free trial with Stamps.com and get $5 in free postage to test it out. No promo code required.

                                              Get Started With Stamps.com

                                              Get started with no commitment today.

                                              Our unbiased reviews and content are supported in part by affiliate partnerships, and we adhere to strict guidelines to preserve editorial integrity. The editorial content on this page is not provided by any of the companies mentioned and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author’s alone.

                                              We Highly Recommend 🏆

                                              is one of our top picks for credit card processing!

                                              We love 's predictable pricing and excellent service.

                                              Their standard offer has no early termination fee and no junk fees. 👍

                                              Learn More At

                                              Sign up for the Maverick Newsletter

                                              • We occasionally send out emails with special offers.