• Square is a comprehensive payment processing platform that caters to businesses of all sizes, from small startups to large enterprises.
  • The system is famous for its ease of use and setup, allowing even new users to start accepting payments in minutes.
  • Square provides businesses with tools to accept payments via credit and debit cards, mobile wallets, and other digital payment methods, both in-person and remotely.
  • Beyond payment processing, Square offers native add-on features, such as invoicing, payroll management, and inventory tracking.

Whether you run a brick-and-mortar store, an online shop, or need a mobile payment solution, follow this four-step guide to start running your business with Square .

Step 1: Open a 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.

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.

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.

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.

Customize your settings

Once your account is created, you can proceed with customizing Square according to your business profile. This includes completing your location information and sales tax settings, setting up your reporting preferences, and customizing your receipts.

  • Standard POS software
  • Payment processing
  • Payment gateway
  • Waived chargeback fees
  • Mobile POS app
  • Basic website builder and online store
  • Online ordering 
  • Basic invoicing
  • Virtual terminal
  • CRM
  • Starter team management plan
  • First magstripe mobile card reader

Read more: What is Square? 

Step 2: Set up your POS app

The Square app is your all-in-one tool for managing transactions, tracking sales, and accessing business insights. And because the POS software is app-based, you can access your account from anywhere to start accepting credit card payments.

To set up your Square POS app, you will need to: 

Download and log in

Download the Square app on your iOS or Android device, then log in with the credentials you created in step 1.

Set up your items and services

To add products in the Square app, open the app and tap the menu to navigate to “Items,” then select “Create Item.” Enter the product name, price, category, and any variations like size or color. Once saved, the item will appear in your checkout screen for quick access during sales. For bulk uploads, you can use Square Dashboard on a desktop to import multiple items at once via a CSV file.

Inventory screen showing a list of banana-themed products and item creation form.
Square inventory library (Image: Square)

Set up your payment methods

From the dashboard, go to the Settings menu. Navigate to “Checkout” or “Payment Methods,” depending on your device or version. From there, you can enable options such as credit/debit cards, gift cards, mobile payments (including Apple Pay and Google Pay), or Afterpay. If you’re using Square Online, you can also connect additional gateways, such as PayPal, from the Online Checkout settings.

Tablet screen displaying payment settings with various accepted payment types listed
Square payment settings (Image: Square)

To add Afterpay as a payment method in Square, go to your Square Dashboard, click on Payments, and select Afterpay under the “Buy Now, Pay Later” section. Follow the prompts to enable Afterpay for eligible online or in-person sales. Once activated, it will automatically appear as a payment option at checkout for qualifying transactions within the supported amount range.

Afterpay settings on Square interface
Square Afterpay integration (Image: Square)

(Optional) Choose Square add-on tools

To enhance your Square POS system, you can explore a range of add-on features in the Square App Marketplace or directly through your Square Dashboard. These include tools for team management, customer loyalty, marketing, inventory, and more. Once you select an add-on, you can enable it with just a few clicks and configure its settings to fit your business needs. After activation, the feature integrates seamlessly with your POS, appearing as new tabs or functions in the app interface.

Square dashboard with add-on features in the menu.
Square dashboard with add-on features in the menu (Image: Square)

Step 3: Set up your sales platform

During sign-up, Square asks how you plan to sell — whether in person, online, via invoice, or over the phone — to tailor the experience to your business needs. Based on your responses, it automatically enables relevant features in your account. Any customizations you make in your Square Dashboard will carry over to your selected sales channels. However, each platform (POS, Online Store, Invoices, etc.) still requires individual setup to ensure everything functions smoothly. 

Here’s a quick rundown of what to do next.

Configure your hardware

Square offers a wide range of hardware for those who intend to accept payments in-person. If you are using a mobile credit card reader, you will need to pair the device with your smartphone or tablet with the Square POS app. However, for most options, the POS app is already loaded onto the hardware, and all you need to do is sign in using the credentials you created in step 1.

To make sure that your Square hardware is ready to use, follow the product’s instructions on: 

  • How to physically install the device
  • How to charge the device
  • How to connect the device with other Square hardware
  • How to test the device

In the news: Square recently launched its latest handheld payment device, Square Handheld. At $399 or $37 x 12 months, this new point of sale hardware is pre-loaded with the latest Square POS app, allowing you to seamlessly accept chip and contactless payments, handle tableside ordering, and manage your business in one sleek device that fits in your pocket for a completely mobile business management experience. Visit Square to learn more.

Square Handheld displaying sample transaction on screen and payment methods.
New Square Handheld (Image: Square)

Customize your online store 

Click on “Online” from the dashboard menu to begin the setup process. You’ll be prompted to choose the type of site you want, whether it’s for retail, food and beverage, or services, and then select a design template. From there, you can customize the layout, colors, and fonts to match your brand. You can easily import products from your existing Square item library or add new ones manually. Next, configure key features like payment methods, shipping or local pickup options, and tax settings. 

Website builder interface for Francie’s Spa showing selected homepage features and a booking preview.
Square website builder (Image: Square)

Design your invoice template

Navigate to the Invoices dashboard, then select “Settings” followed by “Templates”. From there, you can create a new template by choosing the invoice layout, default messaging, payment terms, and any automatic reminders. You can also assign specific branding elements, such as your logo, custom fields, and delivery preferences. Once saved, the template can be applied to any new invoice with a single click, saving time and reducing errors.

Invoice settings screen with customizable templates for different service types and default template selected.
Square invoice template designer (Image: Square)

Step 4: Ring up sales

Square accepts all major credit and debit cards, including Visa, MasterCard, American Express, and Discover. It also supports modern payment methods such as: 

  • Mobile wallets: Like Apple Pay, Google Pay, CashApp, and Samsung Pay
  • Pay later: Via AfterPay
  • ACH: For direct bank-to-bank payments

How to accept in-person card payments with Square 

With Square’s card readers and POS systems, businesses can process payments quickly using chip, tap, or swipe methods. 

Via mobile 

Square card reader being used with Visa card across phone, restaurant, and tablet checkout settings.
Square mobile card readers (Image: Square)

To ring up a sale on Square’s mobile app, open the app and tap the “Checkout” button to get started. Add items to the cart by selecting them from your item library or scanning a barcode with your device’s camera. You can apply discounts, add customer details, or redeem loyalty rewards directly from the cart screen. Once the cart is complete, tap “Charge” to proceed to the payment screen. 

Choose a payment method, such as card swipe, chip, contactless, cash, or Afterpay, and complete the transaction. 

  • Tap and dip payments: Insert the card into the reader with the chip end first and the front of the card facing up. Keep the card in place until the reader emits a beep and all four green lights illuminate. Wait for the confirmation message to appear in the app, indicating the payment was successful. 
  • Magstripe payments: Swipe the customer’s card with the magnetic strip facing the thick side of the reader. If signature or tipping is enabled, prompt the customer to sign or choose a tip amount.
  • Contactless payments: Make sure the reader displays one green light to indicate it’s ready. Then, have your customer hover their card over the reader to initiate the payment. Wait for the reader to emit a beep, show four green lights, and display a confirmation in the app before proceeding.
  • Afterpay: The customer can open their digital Afterpay Card and tap their mobile device to Square hardware or a compatible device, if using Tap to Pay.

After payment, you can send the customer a digital receipt via text or email.

Learn more: 6 Best Mobile POS Systems in 2025

In-store

Square point-of-sale hardware with phone, card swipes, and contactless payments across devices
Square range of POS hardware (Image: Square)

Begin by tapping the “Checkout” icon on the home screen. From there, you can add items to the cart by selecting them from your item grid, scanning the barcode, or searching through your product library. Link the sale to an existing customer or create a new one, then apply any discounts or loyalty rewards to the transaction.

Tap “Charge” to move to the payment screen, then select a payment method such as tap, chip, swipe, or Afterpay. Note that credit card processing is the same for in-store and mobile purchases, though the hardware varies. Once the payment is processed, offer the customer a printed or digital receipt.

How to accept online card payments with Square 

For invoice, e-commerce, and social media transactions, Square’s online payment gateway lets you generate payment links and hosted checkouts. 

E-commerce checkout

To create an e-commerce checkout with Square, navigate to your Square Online Dashboard and select Settings > Checkout. From there, you can customize the checkout page layout, select accepted payment methods such as credit cards and PayPal, and configure shipping options and rates. 

Online checkout page for Piquant showing contact, payment, order summary, and pickup details for coffee purchase.
Square e-commerce checkout designer (Image: Square)

Also read: E-commerce Payment Processing: The Complete Guide

Payment links

From the Online Checkout section, click on “Create Checkout Link” and choose the type of transaction you want, such as collecting a fixed amount, accepting donations, or selling a specific item. Enter the necessary details, such as item name, price, and optional customer information fields. You can customize the link with your business branding and set optional features, such as tipping or requiring contact information. Once the link is generated, you can share it via email, text, social media, or embed it on your website.

Auto detailing hosted checkout screen with Google Pay option and form for contact and credit card information.
Square hosted checkout page (Image: Square)

Invoicing 

Square’s digital invoice comes embedded with a payment link that allows customers to pay remotely for goods and services. To accept credit card payments via invoice on Square, use your template to create an invoice by adding the customer’s and the transaction information. Once received, the customer can click on the Pay button, where they can choose from your available payment methods to complete the payment.

Mobile invoice previews for four businesses showing itemized charges and customer details.
Square simple invoice (Image: Square)

Virtual terminal

A virtual terminal is different because it allows you to process payments on behalf of your customers. Once you have received a payment request with the customer’s payment details, navigate to Square’s virtual terminal. Choose from either a quick charge or an itemized sale, then fill in the customer’s information and purchase order details. Once you’ve verified that all the details are correct, enter the customer’s credit card information to complete the transaction. 

Transaction screen for $40 charge showing manual card entry and confirmation of successful payment with receipt options.
Square virtual terminal (Image: Square)

Learn more: How to Accept Payments Online

Square Payments processing fees 

In my over seven years of reviewing POS and payment processors, I have found that Square does not offer the most cost-effective transaction fees. Although straightforward and easier to manage, Square’s flat-rate pricing model is not the cheapest. 

For small businesses, Square will charge the following rates per transaction:

  • In-person transactions: 2.6% + $0.15
  • 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

However, that’s not to say that there’s no way to minimize these fees. In fact, Square’s processing cost is manageable if you know where to look. Here are my top tips to minimize Square’s transaction fees: 

  1. Encourage card-present transactions: Swiping, dipping, or tapping a card in person typically incurs lower fees than manually entering card details.
  2. Minimize keyed-in payments: Stick to Square’s readers and POS devices to avoid higher fees from virtual terminals.
  3. Set minimum purchase amounts for cards: This helps offset fixed per-transaction fees by encouraging higher average order values.
  4. Consolidate transactions when possible: Bundling multiple small purchases into a single transaction reduces the impact of per-transaction fees.
  5. Apply for Square’s volume discount program: If your business processes over $250,000 in annual card sales with an average ticket size above $15, you may qualify for custom rates. Reach out to Square to submit an application for volume-based pricing.

Pros and cons of Square credit card processing

Square has established itself as a leading payment processing solution, offering a range of features designed to simplify how businesses handle transactions. While it provides an accessible and versatile platform, there are specific advantages and limitations that potential users should consider. 

Pros

  • Easy to set up and use: One of Square’s biggest strengths is its intuitive interface, which allows businesses to get started quickly without requiring 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, allowing businesses to manage multiple aspects from a single 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, which can be a drawback for businesses that need immediate assistance outside regular hours.
  • Account stability issues: Some users have reported account holds or sudden fund freezes, especially for transactions perceived as high risk, which can disrupt business operations.

If Square is not the right fit for your business needs, visit our list of top Square alternatives.

Can you run and scale your business with Square?

We’ve seen how easy it is to use Square to process credit card payments, and as an all-in-one POS solution, it’s also clear that small businesses can easily start and effectively run their operations on the platform. However, the biggest question each time I evaluate Square is: Can Square’s features grow with your business?

The quick answer is yes. While it’s most popular among new and small business owners, Square offers a modular ecosystem that adapts to your growth, with increasingly robust tools as your needs evolve.

Whether you’re a small shop expanding to multiple locations or an enterprise evaluating long-term flexibility, here’s how you can scale with Square:

  • Pricing that grows with you: Square’s pricing model is transparent and usage-based, making it ideal for businesses starting small. For growing and enterprise-level sellers, Square offers custom pricing and volume discounts. This means you can scale without being penalized by flat fees that don’t reflect your transaction volume.
  • Scalable features across business sizes: Start with essentials like POS, inventory, and digital invoices, then layer on advanced tools like team management, multi-location inventory, loyalty programs, subscriptions, and marketing automation as your needs grow. For restaurants and retail, Square also offers purpose-built solutions, such as Square for Restaurants and Square for Retail, which include industry-specific workflows and reporting.
  • Seamless integration with other popular platforms: Square integrates with over 200 third-party apps, including QuickBooks, WooCommerce, Wix, and Mailchimp, so your business tech stack can expand without disrupting core operations. As your systems get more complex, you can connect Square to your CRM, accounting software, or e-commerce storefront with just a few clicks.
  • Developer tools for customization: Enterprise users or tech-savvy businesses can leverage Square’s Developer Platform, which features APIs and SDKs for building custom workflows, embedded checkout experiences, or integrations with proprietary systems. This gives you enterprise-grade flexibility without needing to abandon the Square ecosystem.

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.