Square is one of the most popular payment processing solutions. Businesses of all sizes widely use Square because of its easy-to-use interface, flexible payment options, and robust hardware offerings. Whether you run a brick-and-mortar store, an online shop, or need a mobile payment solution, Square provides a versatile platform to manage sales, track inventory, and enhance the overall customer experience. 

What is Square?

Square is a comprehensive payment processing platform that caters to businesses of all sizes, from small startups to large enterprises. Launched in 2009, Square has evolved from a simple card reader attached to a mobile device into a fully integrated ecosystem. Today, Square offers point-of-sale (POS) systems, payment gateways, and a suite of business tools.

At its core, Square allows businesses to accept payments via credit and debit cards, mobile wallets, and other digital payment methods, both in-person and online. Beyond payment processing, Square offers invoicing, payroll management, inventory tracking, and more. These offerings make it a versatile solution for managing various aspects of your business.

Read more: What is Square? 

How to use Square 

Square’s platform is designed to be user-friendly, making it easy for businesses to get started with minimal effort. Below are the key steps to set up your Square account, navigate the app, and use Square’s hardware for seamless payment processing.

How to set up your Square account 

Setting up your Square account is the first step to accepting payments and managing your business with Square’s powerful tools. The process is simple and can be completed in just a few minutes, allowing you to customize your account settings to match your business needs and start processing transactions quickly.

  1. Create an account: Visit the Square website or download the Square app to create a free account. You’ll need to provide basic information, including your business name, email address, and a secure password.
  2. Verify your business: Complete the identity verification process by providing your personal and business details, including your EIN or Social Security number for tax purposes.
  3. Link your bank account: Connect your business bank account to Square to ensure you receive deposits from your sales. Square offers next-day deposits as the standard option, or you can choose instant transfers for a fee.
  4. Customize your settings: Set up your sales tax, tipping options, and inventory if applicable. You can also personalize your receipts and adjust your checkout settings to suit your business needs.

How to use the Square app

The Square app is your all-in-one tool for managing transactions, tracking sales, and accessing business insights. Here’s how to make the most of it:

  1. Download and log in: Download the Square app on your iOS or Android device, then log in with the credentials you created during your account setup.
  2. Set up your items and services: Use the app to add products, services, prices, and categories, making it easy to navigate during checkout.
  3. Process payments: Tap the items or enter the custom amount, then choose the payment method — cards, cash, mobile wallets, or BNPL options. You can also send digital receipts and track tips through the app.
  4. Access reports and analytics: The Square app provides real-time sales reports, customer insights, and inventory tracking to help you make data-driven decisions.

Card reader and other hardware 

Square offers a range of hardware options that integrate seamlessly with the Square app:

Square mobile card reader for iPhone and Android
The Square Reader for magstripe is free for every Square account.
Square's contactless and chip card reader
The Square Reader for contactless and chip allows businesses to receive payments via dip or tap.
Square Terminal, a mobile POS device
The Square Terminal is an all-in-one payment device that allows you to accept payments and print receipts from anywhere in your store or on the go.
Square Register, a countertop touch-screen POS and card terminal with a customer-facing display
The Square Register is a fully integrated POS solution with a customer-facing display for an enhanced checkout experience.

Pros & cons of Square credit card processing

Square has established itself as a leading payment processing solution, offering a range of features designed to simplify businesses’ transaction handling. While it provides an accessible and versatile platform, potential users should consider specific advantages and limitations. Understanding these pros and cons will help you determine if Square is the right fit for your business needs or if you need to look for Square alternatives.

Pros

  • Easy to set up and use: One of Square’s biggest strengths is its intuitive interface. Businesses can get started quickly without complex setups or lengthy training. This makes Square accessible even for those without technical expertise.
  • Flexible payment options: Square supports a variety of payment methods, including credit and debit cards, mobile wallets like Apple Pay and Google Pay, and Buy Now, Pay Later (BNPL) options, providing a seamless checkout experience for customers.
  • Transparent pricing: Square offers clear, upfront pricing with no hidden fees, making it easy for businesses to understand their processing costs without surprise charges.
  • Comprehensive ecosystem: Beyond payment processing, Square offers a wide range of tools, including invoicing, inventory management, and sales analytics. This allows businesses to manage multiple aspects from one platform.
  • Free POS software: Square’s free point-of-sale software includes features like inventory tracking, sales reporting, and customer management, making it a valuable addition for small to mid-sized businesses.
  • Waived chargeback fees: Square waives chargeback fees up to $250, which can be a significant cost saver for businesses that occasionally face disputes.

Cons

  • Flat-rate fees: While Square’s flat-rate pricing is straightforward, it may not be cost-effective for businesses with high transaction volumes or large-ticket sales, as fees do not scale down with higher usage.
  • Limited customer support hours: Square’s customer support is not available 24/7, for all users. This can be a drawback for businesses that need immediate assistance outside regular hours.
  • Account stability issues: Some users report account holds or sudden fund freezes, especially for transactions perceived as high risk, which can disrupt business operations.

Expert Tip

Want to know how Square stacks up against other payment solution providers? Read our articles comparing Square to others:

Accepting payments with Square

Square offers a variety of payment options, making it easy for businesses to cater to their customers’ preferred payment methods. From traditional card payments to modern digital wallets and Buy Now, Pay Later (BNPL) solutions, Square’s versatility enhances the checkout experience and supports seamless transactions.

Card payments

Square accepts all major credit and debit cards, including Visa, MasterCard, American Express, and Discover. With Square’s card readers and POS systems, businesses can process payments quickly using chip, tap, or swipe methods. Additionally, Square’s built-in fraud prevention tools help protect your business and customers from unauthorized transactions.

Mobile wallets

Square supports mobile wallets like Apple Pay, Google Pay, and Samsung Pay. These popular mobile wallets allow customers to make contactless payments using their smartphones or wearable devices. 

ACH payments

Square also offers Automated Clearing House (ACH) payments, which enable customers to pay directly from their bank accounts. ACH payments benefit businesses handling large transactions, recurring payments, or subscriptions, as ACH payments typically have lower processing fees than credit cards.

BNPL option

Square’s integration with BNPL provider Afterpay enables businesses to allow customers to split their purchases into manageable installments. BNPL can boost sales and increase average order value as it makes larger purchases more accessible.

Square Payments processing fees 

Square offers a straightforward, flat-rate pricing model. This model makes it easy for businesses to understand their costs without hidden charges or complex fee structures. Here’s a breakdown of the main fees associated with Square’s payment processing:

  • In-person transactions: 2.6% + $0.10
  • Online transactions: 2.9% + $0.30
  • Manually keyed-in transactions: 3.5% + $0.15
  • Invoices/payment links: 3.3% + $0.30
  • ACH payments: 1%, with a minimum of $1 per transaction
  • BNPL transactions (Afterpay): 6% + $0.30

Frequently asked questions (FAQs)

Square allows businesses to accept payments, manage sales, and streamline operations both in-person and online. By setting up a free account, you can use Square’s hardware—like card readers and POS systems—to process payments via cards, mobile wallets, and contactless options. The Square app helps you manage transactions, track inventory, and access sales data, with funds typically deposited into your bank account within one business day.

Square offers an easy-to-use, all-in-one solution for accepting payments, managing sales, and running your business. Its transparent pricing, flexible payment options, and comprehensive tools — like POS systems, invoicing, and inventory management — make it ideal for businesses of all sizes. Whether you’re running a storefront, online shop, or mobile business, Square simplifies payment processing and helps you operate more efficiently.

Square is free to set up and use, with no monthly fees for its basic features, including the Square POS app and basic payment processing tools. You only pay transaction fees when you make a sale. Optional add-ons, like advanced POS features, payroll, or marketing tools, also incur additional costs.

Andrea Herrera Avatar
Andrea Herrera
Staff Writer
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Andrea is a retail expert writer at Fit Small Business, contributing to the payments section. Before joining Fit Small Business, she was an actuarial specialist and freelance writer. She also has experience helping online businesses with order and payment processing. Andrea has more than 11 years of experience writing online content on various topics ranging from marketing to business.