How Does Square’s Instant Deposit Work?
Honestly, every time I turn around Square has introduced something new. (As I’m the person who maintains our Square review, you can see why I might find this just a tad frustrating.) On the one hand, it is absolutely amazing that Square is so committed to rolling out new features for merchants. On the other, just trying to keep up with what Square offers makes me want to tear my hair out a bit! Square’s Instant Deposit feature has been around for a while now, but the company is still making the occasional tweak or improvement to the service. This is good because being able to get your funds almost instantly is a major consideration for merchants.
Looking for information on the Square Cash App for sending money with your phone? Check out our in-depth Cash App review.
So how does Square’s Instant Deposit work? How does Square’s payment schedule compare to other mobile payment services? Is the trade-off for instant access to your funds worthwhile?
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Table of Contents
How Does Square’s Deposit Schedule Work Normally?
Even without Instant Deposit, Square does pretty well at timely deposits. Your money will typically reach your bank account within 1-2 business days, depending on when the transaction is processed:
If you swipe the transaction before 5 PM Pacific time (8 PM Eastern), your funds will be transferred over to your bank account the next business day. If you swipe a transaction after that cut-off time, you’ll have your funds in 2 business days. Square’s standard deposit schedule doesn’t allow for deposits on weekends or holidays.
That means that if you accept a payment at 4:30 PM Pacific Time on a Tuesday, you’ll have your funds on Wednesday morning. If you accept a payment at 6:30 PM Pacific Time on that same Tuesday, the funds from that transaction will be available Thursday. If the transaction happened at 4:30 PM on a Friday, you’d see the funds Monday morning; for a transaction at 6:30 PM, you’ll have your money on Tuesday morning.
However, Square allows merchants to adjust their official “Close of Business” times and to group all the transactions from one day into a single deposit. This means if you set your close of business to 6 PM Pacific (9 PM Eastern), and select “Next Business Day” as your standard deposit schedule, all your transactions from that day will be deposited in two business days, rather than anything before 5 PM being deposited in 1 business day and anything after that being deposited in 2 business days.
What Is Instant Deposit?
With Instant Deposit, you can move funds from your Square account to a linked debit card in a matter of minutes rather than wait the standard 1-2 business days.
Want more information on quick credit card processing payouts? Check out our post on how to get your funds fast.
That said, using Instant Deposit comes with a few requirements:
- The sum must be at least $25.
- The maximum amount is $10,000 (but you can set up multiple instant deposits).
- Individual transactions exceeding $10,000 are not eligible for Instant Deposit and will be sent using the Next Business Day schedule.
- New sellers are limited to one Instant Deposit per day for up to $500; this limit increases over time.
The biggest thing you need to know about this feature is that Square will charge you 1% of the deposit amount (so 1% of the sum after Square’s fees are taken out). That’s a lot in the world of payment processing, but not a crazy fee when you look at the actual cost in dollars. For businesses in need of funds ASAP, the benefits could easily outweigh the cost.
Let’s say you process $575 in Square transactions in a day. After Square’s fees (assuming every transaction is swiped, not keyed in), you would have $559.47. Deduct 1% ($5.59) and you could transfer $553.88 to your bank account that evening.
If you plan to make use of this feature regularly, you don’t actually need to go in daily and request your funds. You can set up Same-Day Deposits (formerly called Scheduled Deposits) in Square that will automatically transfer the funds for you based on your Close of Business time. It’s also possible to mix deposit types, so if you prefer to have your funds from Friday right away but you can wait for next business day for Sunday-Thursday, that’s entirely within the realm of possibilities.
How Does Instant Deposit Compare to Other Payment Processing Services?
There’s really only one other processor that offers you access to funds almost right away: PayPal. Your funds go straight to your PayPal wallet so you can spend them online — or anywhere that accepts MasterCard if you have the PayPal business debit card. If you want to transfer your PayPal funds to your bank account, it’s free, but it could take up to 3-4 days depending on your bank. (In my experience, it only takes 24-48 hours, but your mileage may vary.) PayPal also offers instant deposits for 1% of the transfer sum (formerly $0.25 per transfer). However, I do want to mention that Square offered instant transfers first.
So how long is it before you get your funds using other processors? Let’s take a look:
- Square: 1-2 business days standard; instant available
- PayPal Here: Instant availability in PayPal; bank transfers 3-4 days
- Intuit GoPayment: 2-3 business days
- Clover Go: Varies by reseller/bank; PNC and Bank of America offer next-day funding in some circumstances
- Stripe: 2 business days
- Shopify: 2 business days (in the US; other locations vary)
- Most Merchant Accounts: 24-48 hours
Final Thoughts: Is Square Instant Deposit Worth It?
So is paying an extra 1% for Square’s instant deposit actually worthwhile? That’s entirely up to you. If you’re in a position where waiting 1 to 2 business days is perfectly OK, it’s not like you HAVE to use Instant Deposit. But if you find yourself in a pinch and suddenly needing an extra bit of cash, it’s certainly a nice feature to have available. Square’s even put a bit of thought into the option, allowing you to schedule recurring instant deposits. If you really do insist on having your money right away, it’s yours.
Even most merchant account providers can’t offer that kind of convenience. Typically, the best merchant accounts include next-business day deposits, meaning that after close of business (usually anywhere between 5-7 pm), the funds are in your bank account the morning of the next business day. Others offer 24-48 hour turnaround, which is fairly standard and comparable to Square’s standard deposit schedule. At no point should you work with any processor who takes longer than 2-3 days to process payments normally.
What do you think about Instant Deposit? Do you like it? Are there any other mPOS solutions that get you your funds as fast? Let us know in the comments!