Key takeaways
- Square is a one-stop shop for affordable POS and payment solutions.
- The Square ecosystem features a comprehensive forever-free plan.
- In addition to being free, Square is one of the easiest POS systems to set up and use.
- For larger businesses, Square offers custom processing fees, tailored POS solutions, and advanced developer integrations.
Managing a business requires tools that streamline essential tasks like payment processing, inventory tracking, customer management, and sales reporting. As your business grows, those tools should scale with you. Square is a popular all-in-one platform that combines payments, point-of-sale (POS) software, and business management tools in a user-friendly ecosystem designed for small businesses, with the flexibility to support growth over time.
What is Square?
Square is an all-in-one point-of-sale (POS) system that combines payment processing, ecommerce tools, and built-in business management features in a single platform. Businesses can use Square to accept payments in person, online, and on mobile devices while managing inventory, customers, and sales from one dashboard.
Because the software is app-based, getting started is simple: create an account, download the free POS app on a compatible device, and begin accepting payments. Square also offers integrated hardware and advanced tools for payroll, marketing, invoicing, and reporting as your needs grow.
Square is especially popular with small and new businesses thanks to its feature-rich free plan. However, it also provides industry-specific POS systems and scalable upgrades, making it suitable for growing and established businesses alike.
| Every free Square account comes with: |
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| Other Square products and add-ons: |
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Square payment processing
Square is a fintech company, and payment processing is at the core of its platform.
Square operates as a payment facilitator (PayFac), meaning it maintains a master merchant account with acquiring banks. When a business signs up for Square, it receives a sub-merchant account under that master account. This structure allows businesses to start accepting payments quickly without going through a traditional merchant account underwriting process.
As a payment facilitator, Square handles the movement of funds on your behalf. It connects to major card networks for credit and debit card payments and to the ACH network for bank transfers. Once a transaction is approved, Square processes the payment and deposits funds into your linked bank account, typically within one to two business days.
Because of this model, businesses can avoid lengthy approvals and begin accepting multiple payment methods almost immediately. Square also offers transparent pricing, no long-term contracts, and no required monthly fees for its basic POS plan.
Available payment methods
| Accepted payment methods |
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| Supported payment services |
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Payment processing fees
Like most payment facilitators, Square offers flat-rate pricing, which may not be the lowest terms but are easiest to manage for small and new businesses. Businesses that process more than $250,000 annually must work with Square to negotiate custom rates, which typically involve volume discounts and likely better pricing models such as interchange plus or subscriptions.
Below are Square’s standard payment processing fees:
- Monthly payment processing account fee: $0
- Cash, cheque, vouchers, and other tenders: $0
- Credit cards:
- In-person transaction: 2.6% + 15 cents to 2.4% + 15 cents
- Online: 3.3% + 30 cents to 2.9% + 30 cents per transaction
- Keyed-in and card-on-file transactions: 3.3% + 15 cents per transaction
- Chargeback fee: Waived up to $250/month
- Invoicing: 3.30% + 30 cents to 2.9% + 30 cents per transaction
- ACH Payments: 1%, minimum $1
- Afterpay: 6% + 30 cents per transaction
- CBD program transactions: From 3.5% + 10 cents per transaction
- Same-day funding: + 1.75%
- Volume discounts: With a paid POS plan, or more than $250,000 in annual sales volume and over $15 in average ticket size
All Square payments processing comes with free dispute management, active fraud prevention, end-to-end encrypted payments, live phone support, and PCI compliance.
Square hardware
While Square’s software is app-based, it does provide its own range of proprietary hardware, which is designed for scalability.
It starts with mobile credit card readers, where users get a separate magstripe and contactless device. Next is a versatile iPad stand with a built-in card terminal that can be set up as a countertop or kiosk. Lastly, Square provides mobile and countertop versions of a stand-alone checkout terminal, complete with a built-in touch screen, customer display, and swipe, chip, and contactless card readers.
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Square Magstripe Reader First reader free $10 every additional reader | Square Contactless Reader $59 | Square Stand $149 or $14 per month over 12 months | Square Terminal $299 or $27 per month over 12 months | Square Handheld $329 or $30 per month for 12 months | Square Register $899 or $44 per month for 24 months |
Square point of sale
Square POS is available on iPads, iPhones, Android devices, and Square’s proprietary hardware, including Square Register and Square Terminal. Businesses can accept payments in person, online, and on mobile devices while managing sales, inventory, and customers from a single dashboard.
Square now offers three unified software plans per location: Square Free, Square Plus, and Square Premium. Businesses can switch or cancel plans at any time without long-term contracts.
| Plan | Monthly Fee (per location) | In-Person | Online | Manually Entered | Invoices |
|---|---|---|---|---|---|
| Square Free | $0 | 2.6% + 15 cents | 3.3% + 30 cents | 3.5% + 15 cents | 3.3% + 30 cents |
| Square Plus | $49 | 2.5% + 15 cents | 2.9% + 30 cents | 3.5% + 15 cents | 2.9% + 30 cents |
| Square Premium | $149 | 2.4% + 15 cents | 2.9% + 30 cents | 3.5% + 15 cents | 2.9% + 30 cents |
What’s included in the Square POS plan
All plans include core business tools such as:
- POS software
- Inventory tracking
- Payment processing for cash, credit, debit, mobile wallets, and gift cards
- Invoicing and estimates
- Online store and website builder
- Virtual terminal
- Customer directory (CRM)
- Sales reporting
- Returns and refund management
- Tip management
- Digital and printed receipts
- Offline payment processing (with limitations)
Higher-tier plans include expanded reporting, employee management tools, and advanced operational features designed for growing or multi-location businesses.
Key upgrades with paid plans
| Feature Category | Square Free | Square Plus | Square Premium |
|---|---|---|---|
| Advanced Reporting | Basic reports | Expanded reporting tools | Advanced analytics & insights |
| Team Management | Basic permissions | Advanced team roles & controls | Multi-location workforce tools |
| Operational Controls | Core tools | Enhanced operational features | Enterprise-level controls |
| Processing Rates | Standard rates | Reduced in-person & online rates | Lowest in-person rate |
| Multi-Location Support | Limited | Improved management tools | Built for multi-location scaling |
| Support | Standard support | Priority support | Premium support options |
What you get with upgrading
Upgrading to Square Plus is designed for growing businesses that need deeper reporting, stronger team management, and slightly lower transaction rates for in-person and online payments.
Square Premium is built for higher-volume or multi-location businesses. It offers the lowest in-person processing rate, expanded operational oversight, and advanced support options.
Additional features and products
Square offers a full ecosystem of business tools across four main categories: commerce tools like payment processing and point of sale, customer management tools like marketing and CRM, employee management tools like shift scheduling and payroll processing, and banking tools like business checking accounts.
Here’s a full breakdown:
Square commerce products
Beyond POS software, Square offers a suite of commerce tools that allow businesses to sell, invoice, and collect payments across multiple channels.
Square’s invoicing feature is easy to customize and offers automated tools for alerts and follow-ups. (Source: Square) 
Square Online comes with a drag-and-drop functionality, making it easy for first-time users to set up their website. (Source: Square) 
Square’s mobile-first online menu opens your online ordering website like an app (Source: Square)
Invoicing
Square Invoices is included with every account and supports one-time and recurring billing. Businesses can customize invoices with branding, line items, messaging, payment terms, and automated reminders.
There are no monthly fees for basic invoicing, but Square invoicing fees apply per transaction. Card payments are charged at Square’s standard processing rate, while Square ACH fees are typically lower and capped per transaction, making ACH a cost-effective option for larger invoices.
Square Online
Every Square account includes access to a free website builder with integrated ecommerce functionality. Businesses can create an online store, sync products directly from their Square inventory, and manage orders from the same dashboard used for in-person sales.
Square Payments is built in, so merchants can accept credit cards, debit cards, mobile wallets, and other supported payment methods without additional integrations. Paid upgrades are available for businesses that need a custom domain, advanced site customization, or lower online processing rates.
Read more: Square vs Shopify
Online ordering & delivery
Square provides restaurants with online ordering tools, including a mobile-friendly ordering site, QR codes for digital menus, and shareable checkout links for social media.
Restaurants can enable pickup, local delivery, or integrate with third-party delivery platforms directly from the Square dashboard.
Payment links and buy buttons
Square allows businesses to generate secure payment links from the dashboard. These links can be shared via email, text message, messaging apps, or embedded on websites and social media platforms.
Buy buttons can also be customized for different use cases, such as “Donate Now” for nonprofits or “Subscribe Now” for recurring services.
Gift cards
Square offers both digital and physical gift cards. Digital gift cards can be created and sold online with no upfront cost beyond standard processing fees. Physical gift cards are available for purchase, with per-card pricing that decreases at higher order volumes.
Gift card balances are automatically tracked within Square’s system, and customers can reload cards or receive refunds back to a gift card when applicable.
Square customer management plan
Square includes built-in customer management features and offers advanced marketing tools as optional add-ons. These products integrate directly with Square POS, ecommerce, and payments data to help businesses engage and retain customers.
Square combines email and text marketing with CRM to nurture your customer base (Source: Square) 
Square Messages help businesses efficiently manage customer communications from a single platform. (Source: Square) 
Square’s loyalty program tools automatically integrate into the customer directory, tracking purchase history and customer preferences. (Source: Square) 
Square’s customer directory is seamlessly integrated with other Square products such as text and email marketing and loyalty tools. (Source: Square) 
The Square Photo Studio is integrated with the product catalog, so updates are seamless across all sales channels. (Source: Square) 
Square Go lets customers manage their appointments from a mobile app. (Source: Square)
Marketing
Square Marketing supports email and SMS campaigns. Businesses can create one-time promotions or automated campaigns triggered by customer behavior, such as first purchases or lapsed visits.
Templates can be saved for recurring promotions, and performance metrics are tracked directly within the Square dashboard. SMS marketing can be used on its own or paired with email campaigns for multi-channel outreach.
Messages
Square Messages allows businesses to send and receive SMS communications from the Square dashboard. Conversations are linked to customer profiles, making it easy to track interactions and purchase history in one place.
For service-based businesses using Square Appointments, Square also offers an AI-powered booking assistant that helps customers schedule appointments and respond to common inquiries automatically.
Loyalty programs
Square Loyalty (paid add-on in most cases) enables businesses to create customizable rewards programs. Features include:
- Points-based or visit-based rewards
- Limited-time promotions
- VIP tiers
- Digital loyalty passes compatible with Apple Wallet
Customers can enroll in-store, online, or through the Square POS app.
Customer directory
Every Square account includes a free customer directory. Customer profiles automatically sync with transactions, invoices, loyalty activity, and marketing campaigns.
Businesses can use this data to segment audiences, analyze purchasing behavior, and generate targeted reports.
Square Photo Studio
Square Photo Studio is a mobile app designed to help businesses create professional-looking product images. Using AI-powered editing tools, users can enhance lighting, remove backgrounds, and optimize product photos for ecommerce listings.
Square Go (Marketplace)
Square Go is a marketplace app for businesses using Square Appointments. Customers can search for nearby service providers, book appointments, manage reservations, communicate with businesses, and leave reviews, all within the app.
Contracts
Square Contracts is a free tool available through the dashboard. Businesses can create and send customizable agreements, including service contracts, policies, waivers, and credit card authorizations. Templates can be edited and sent for digital signature directly within Square.
Square staff products
Square offers several workforce management products that integrate directly with Square POS and payment data. These tools help businesses manage scheduling, payroll, communication, and HR compliance from the same ecosystem.
Square Shifts provides automated time cards to show attendance, shift swapping and time-off requests within the app. (Source: Square) 
Manage shift swapping and time off requests in the Teams app (Source: Square)
Square Shifts
Square Shifts is a team scheduling and time-tracking tool that syncs with Square POS. Businesses can create schedules, track attendance, manage time cards, and monitor labor costs from the dashboard.
Shifts also supports payroll preparation and reporting. A free tier is available with basic functionality, while advanced features are offered at a per-employee monthly cost.
Square Team Communication
Square includes built-in team communication tools that allow managers and staff to send announcements, share updates, and message each other directly within the platform. Conversations are tied to team member profiles, making it easier to coordinate schedules and daily operations.
Advanced team management features are available through paid upgrades.
Square Payroll
Square Payroll allows businesses to run payroll manually or automate pay runs. It integrates with Square’s time tracking and tip reporting tools to calculate wages accurately.
Key features include:
- Automatic tax calculations and filings
- Direct deposit
- Contractor payroll options
- Benefits integrations (health insurance and retirement partners)
- Employee onboarding tools
Square also supports instant wage access through Cash App in eligible cases.
Payroll pricing is structured as a base monthly fee plus a per-employee charge.
HR and compliance tools
Square offers HR support tools to help businesses manage compliance and documentation. These features may include:
- Employee handbook templates
- New-hire paperwork management
- Workers’ compensation options
- Compliance alerts for labor law changes
- Access to HR advisory services (with select plans)
These tools are typically available as paid add-ons.
Square banking products
Square offers integrated financial services through Square Banking, which includes business checking, savings, credit, and lending products. These accounts are designed to work seamlessly with Square POS and payment processing.
Use Square Savings to set aside funds for sales tax and other business goals. (Source: Square) 
Loan application and repayment are easy and done from the Square dashboard (Source: Square)
Square Business Checking
Square Business Checking is a business bank account built for Square sellers. There are:
- No monthly maintenance fees
- No minimum balance requirements
- No overdraft fees
- No account opening deposit
One of its key features is instant access to Square sales. Funds from card transactions can be deposited into a Square Checking account immediately at no additional cost, instead of waiting the standard one to two business days.
Square provides a debit card for purchases and ATM withdrawals. ATM access is free at in-network locations.
Square Business Savings
Square Business Savings allows businesses to automatically set aside a percentage of daily sales into a savings balance. Funds can be transferred instantly to Square Checking at no cost.
There are:
- No minimum balance requirements
- No monthly fees
Savings balances earn a variable APY (the rate changes periodically). Funds are FDIC-insured through Square’s partner banks, subject to standard coverage limits.
Square Credit Card (Square Credit Card / Square Card)
Square offers a business credit card for eligible sellers. The credit line is based largely on a business’s Square sales history rather than personal credit alone.
Key features include:
- No annual fee
- No late fees
- Automated repayment options tied to daily sales (if selected)
- Rewards that can be applied toward Square processing fees
The card integrates directly with the Square dashboard for tracking spending and managing payments.
Square Loans (Square Capital)
Square provides small business financing through Square Loans (formerly Square Capital). Loan offers are based on a business’s payment processing history with Square.
Key features include:
- Loan amounts typically ranging from a few hundred dollars up to several hundred thousand dollars (based on eligibility)
- No traditional interest rate — instead, a fixed flat fee is charged upfront
- Automated repayment through a percentage of daily sales
- No ongoing monthly payment schedule
Because repayments adjust with daily sales volume, payments are lower on slow days and higher on busy days.
Benefits of using Square
All-in-one business solution
Square provides an integrated ecosystem that combines POS software, payment processing, ecommerce, and business management tools in one platform. Merchants can accept payments in person, online, and via mobile devices using Square’s proprietary hardware or compatible third-party devices.
Square also offers industry-specific solutions for retail, restaurants, and appointment-based businesses. Additional tools, including team management, payroll, marketing, and loyalty, are available as add-ons. For businesses that already use other software, Square supports a wide range of third-party integrations, including accounting, ecommerce, and delivery platforms.
Feature-rich free plan
Square’s free POS plan lowers the barrier to entry for new and small businesses. There are no monthly software fees for the basic plan, allowing merchants to start accepting payments with minimal upfront cost. Businesses only pay per-transaction processing fees, making it easier to launch without long-term contracts or subscription commitments.
Easy to use
Square is known for its user-friendly interface and straightforward setup process. Businesses can create an account, download the POS app, and begin accepting payments quickly.
The dashboard includes guided setup tools for adding inventory, configuring payment options, customizing invoices, and launching an online store. This simplicity makes Square especially appealing to first-time business owners.
Multichannel selling capabilities
Square supports in-person, online, and mobile sales from a single account. Each account includes access to Square Online, enabling businesses to build and manage an ecommerce site that syncs automatically with in-store inventory.
Merchants can also generate payment links, QR codes, and digital invoices directly from the dashboard to collect payments through email, text, social media, or embedded checkout pages.
Seamless ecosystem
All of Square’s tools are fully integrated. Inventory, customer profiles, reporting, and sales data sync in real time across channels. This built-in omnichannel functionality helps businesses maintain accurate stock levels, track customer behavior, and deliver a consistent buying experience, whether customers shop online or in-store.
Read more: Square reviews
Square competitors and alternatives
Square’s main competitors and alternatives are PayPal, Stripe, and Helcim. All three of these companies also offer free accounts with different payment processing tools.
| Square | PayPal | Stripe | Helcim | |
|---|---|---|---|---|
| Best for | Small business | Seasonal, occasional sellers | Online sales | Fast-growing businesses & B2Bs |
| Merchant account type | Aggregate | Aggregate | Aggregate | Traditional/dedicated |
| Fee structure | Flat rate | Flat rate | Flat rate | Interchange plus |
| Monthly software fee | $0-$149 (POS+payments) | $0-$30 (virtual terminal) | $0-$10 (Custom domain) | $0 |
| Chargeback fee | Waived up to $250/mo | $20 | $15 | $15 refundable |
| Volume discounts | Sales volume > $250,000/year | Upgrade to Braintree for interchange plus rates | Custom interchange plus rates quote for large-volume sales | Built-in volume-based discounts |
| Scalability | Integrations, Square large business solutions | PayPal for Enterprise + upgrade to Braintree | Coding-based customizations | Developer tools and APIs |
Read more: Check out our recommended best alternatives to Square.
PayPal vs Square
PayPal is a pioneer in online payment processing and a trusted brand known for improving online conversion rates. It supports mobile payments via a mobile POS app and proprietary mobile card reader. PayPal offers a wide range of payment solutions and is particularly unique for its proprietary payment methods that make it easy to sell to customers with a personal PayPal account.
Though both PayPal and Square are easy to set up (both are payment facilitators) and essentially mobile-based, PayPal is a better option for occasional sellers because it doesn’t require its users to create a complete POS platform to start selling. And PayPal payment methods can be easily added to any ecommerce website. Square Payments is exclusive to websites created on the Square platform.
Read more: How Square stacks up against PayPpal.
| Square | PayPal | |
|---|---|---|
| Best for | Small business | Occasional sellers and ecommerce businesses |
| Merchant account type | Aggregate | Aggregate |
| Fee structure | Flat rate | Flat rate |
| Monthly software fee | $0-$149 (POS+payments) | $0-$30 (virtual terminal) |
| Chargeback fee | Waived up to $250/mo | $20 |
| Volume discounts | Sales volume > $250,000/year | Upgrade to Braintree for interchange plus rates |
| Scalability | Integrations, Square large business solutions | PayPal for Enterprise + upgrade to Braintree |
Stripe vs Square
Stripe is a popular online payment processor that also serves as a payment facilitator, offering a free merchant account similar to Square. It is a developer-first platform that allows for nearly unlimited customization options via APIs and SDKs. That said, Stripe also offers payment processing services that don’t require coding, such as basic checkout, invoicing, and recurring billing tools.
Stripe’s clear difference from Square is that it has no native POS software (PayPal has Zettle). It requires custom integration to use the system with a business platform but offers huge customization potential. To put it in perspective, Stripe powers Shopify’s payment processing service, Shopify Payments. Stripe also requires users to design a mobile POS app to work with their credit card readers.
Read more: Our detailed comparison of Square vs Stripe.
| Square | Stripe | |
|---|---|---|
| Best for | In-person sales | Online sales |
| Merchant account type | Aggregate | Aggregate |
| Fee structure | Flat rate | Flat rate |
| Monthly software fee | $0-$149 (POS+payments) | $0-$10 (Custom domain) |
| Chargeback fee | Waived up to $250/mo | $15 |
| Volume discounts | Sales volume > $250,000/year | Custom interchange plus rates quote for large-volume sales |
| Scalability | Integrations, Square large business solutions | Coding-based customizations |
Helcim vs Square
Helcim is a merchant account provider that offers a variety of payment methods and services. Like Square, Helcim also offers free point-of-sale, invoicing, and ecommerce software. Unlike Square, Helcim supports a number of additional cost-saving features, such as built-in volume discounts, free credit card processing, and level 2 and 3 data processing for B2Bs — all automated so savings are always optimized.
Also, unlike Square, Helcim offers a traditional merchant account. So, while it’s less prone to holds or frozen funds, it requires an approval process, for which most small businesses may not be suitable. The fee structure is also set to maximize savings compared to Square’s.
| Square | Helcim | |
|---|---|---|
| Best for | Small and new businesses | Fast growing businesses & B2Bs |
| Merchant account type | Aggregate | Traditional/dedicated |
| Fee structure | Flat rate | Interchange plus |
| Monthly software fee | $0-$149 (POS+payments) | $0 |
| Chargeback fee | Waived up to $250/mo | $15 refundable |
| Volume discounts | Sales volume > $250,000/year | Built-in volume-based discounts |
| Scalability | Integrations, Square large business solutions | Developer tools and APIs |
FAQs
What is the benefit of using Square?
The major benefit of using Square is the access to a complete suite of business software solutions to customize and grow a POS system based on your business needs. Square is a one-stop-shop, which makes for an easy set up.
How exactly does Square work?
Square works by integrating its core POS software with its in-house payments, ecommerce, and other business management tools. It runs sales and manages inventory across multiple channels from a single POS dashboard and supports real-time inventory and sales information on all of your selling platforms (mobile, in-store, ecommerce, virtual terminal).
Can you use Square POS for free?
Yes. Square provides one of the most feature-rich free plans in the market that includes payment processing, website builder & management, mobile POS app, virtual terminal, and a free magstripe mobile card reader.
Is Square a good POS system?
Yes, Square is a great POS system that offers the best value-for-money especially for small and new businesses. Square also offers great potential for building a custom POS solution for large businesses.
Do you need a bank account for Square?
Yes, you will need to link a business bank account when you sign up for a Square account. Square will send the proceeds of your sales (net of transaction fees) to your business bank account.
Is Square suitable for large businesses?
Yes, Square is used by many large businesses such as Shake Shack, SoFi Stadium, and Ben & Jerry’s. It utilizes a combination of advanced developer tools and various third-party partnerships to provide tailored solutions.
Is Square HIPAA compliant?
Square’s POS software is HIPAA compliant. It signs business associate agreements (BAA) with healthcare providers, making handling patient information in the Square POS system legal. Square integrates directly with popular EHRs Remedly and DrChrono, and can process payments using Health Savings Account (HSA) and Flexible Spending Account (FSA) debit cards.