Square: Should You Use It For Your Business?

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Square: Should You Use It For Your Business?

Great mobile credit card processing, and good for online use as well

Good for

  • Businesses that are just starting out
  • E-commerce credit card processing

Bad for

  • Businesses with more than $17,647 in monthly transactions

Editor's Rating


Square is a popular credit card processor for good reasons. It offers quick setup for small businesses with relatively low costs. While the per-transaction cost on this processor is higher than most, you don’t have to pay monthly fees that can drive up total costs really quickly – especially if you’re operating a small shop.

Review: Should You Get Square for Credit Card Processing?

Square offers an inexpensive and simple way for your business to start accepting credit card payments. Relative to other payment processors we’ve looked at, including Flagship Merchant Services and Helcim, Square comes with fewer overhead costs and doesn’t charge businesses’ monthly fees or monthly minimums. Both these fees are standard if you were to look at other credit card payment processors. While the per-transaction costs are a little more expensive, you will save money when processing low volumes by skipping those fixed costs. That is why Square is good for companies that are new or don’t process that many card payments on a monthly basis.

Good For…Bad For…
Businesses that are just starting outBusinesses with more than $17,647 in monthly transactions
E-commerce credit card processing

Square also offers competitive pricing when it comes to online credit card. You pay 2.9% + $0.30 for each transaction. This is the same price we’ve seen from their competitors, including PayPal and Stripe. Unlike PayPal, however, Square doesn’t charge you an additional fee for integrating their checkout into your website. Therefore, if that is something that’s important to you, consider Square. If you don’t have developers handy that can build a checkout experience on your company website, however, PayPal may be the best way to go, since you can still redirect people to their website.

Though Square doesn’t have many overhead costs, it still comes with additional solutions that can help manage your card sales. For example, you’ll have access to an online dashboard where you can monitor your sales, and generate various reports, organizing them by employee, inventory type, and other cross-sections. This is all included in the base package, and you don’t have to pay extra for it.

Bottom Line: While Square is relatively expensive on a per-transaction basis, by skipping overhead costs it actually manages to come out ahead price-wise over other card processors. Despite not charging any monthly fees, you still get access to decent reporting and an analytics dashboard that can help your business manage your sales.

Square Up Fees, Features & Benefits

Important: Throughout this article, we talk about Square’s 2.75% rate on retail credit card processing. This rate only applies if you sign up and enroll yourself through their website. If you call-in and have them set up your account, your rates may be higher.

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Square Credit Card ProcessingDetails
Transaction Cost
  • Swiped, dipped, or tapped 2.75%
  • Keyed-in: 3.5% + $0.15
  • Online: 2.9% + $0.30
Networks Accepted
  • Visa
  • Mastercard
  • Discover
  • American Express
Monthly FeeNone
Monthly MinimumNone
Equipment Cost
  • Magstripe Reader: Free
  • Chip Card Reader: $29
  • Contactless + Chip Reader: $49
  • Stand: $99

Square offers straightforward pricing for the most barebones services. You pay 2.75% of every swiped, dipped or tapped payment, and 2.9% + $0.30 per online transaction. While this is higher than what some other credit card processing companies charge, Square doesn’t come with other overhead costs. For example, there are no monthly fees or minimums to meet. This can be good for businesses that only occasionally need credit card processing.

The hardware solutions on square range from free to $99. However, given the current legislation regarding fraud liability, U.S. merchants should opt to get the chip card reader ($29), never just the free magstripe reader. If you only get the latter, you will not be refunded any money if someone uses a fraudulent credit card to make a purchase at your establishment.

If you want more services and software solutions on top of this, however, you will need to pay additional fees. For example, Square offers payroll processing that can help you manage hourly workers. The cost of this service will depend on the number of employees you manage, though it starts at $30 per month. For a full list of Square business solutions, we recommend checking out their website.

How Much Can Square Up Credit Card Processing Cost Your Business

To give a better idea of the cost associated with picking Square as your credit card processor, we ran it through a few simulations for a handful of sample business profiles. These were the results. The following are based on an average transaction size of $100, and swiped/dipped transactions for retail.

Transaction Volume (Monthly)RetailE-Commerce

How Does Square Compare to Other Credit Card Processors?

We took a look at how Square compares to other credit card processing companies. You should always consider several options and shop around for quotes before deciding on one company.

Square vs PayPal Here

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On the cost front, PayPal and Square are relatively similar for offline transactions. However, Square offers cheaper online integration. PayPal offers two packages for e-commerce – PayPal Payments Standard and PayPal Payments Pro. The first package has no monthly fees. The second costs $30 per month, but in return you get to customize the checkout experience, and embed it on your website. If you sign-up for Square's E-Commerce marketplace, which is their platform for online credit card processing, there is no extra charge to build these things into your site. However, if you have no technical knowledge on how to integrate Square into your website, you may want to consider PayPal's default service instead since it requires less of an installation.

One of the other big differentiators between Square and PayPal here is how quickly the funds from sales get to your account. When you use Square, the funds of a sale will be deposited the next day, assuming you don’t pay for the premium service that does it immediately. With PayPal, the funds deposit instantaneously but only into a PayPal account. If you want those transferred to a bank account, the process can take up to three days. This may be a big deal for merchants who don’t want to wait that long to have access to their funds.

PayPal also offers working capital loans for small businesses that can be a good solution for companies that cannot qualify for traditional business loans.

PayPal Highlights

  • Simpler to set-up for e-commerce, but more expensive if you want it built into your website
  • 2.7% per retail transaction
  • No monthly fees

Square vs Stripe

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There is little noticeable difference between Square and Stripe. They both charge comparable rates to handle e-commerce credit card transactions, 2.9% + $0.30. They also both do not charge you any excessive monthly fees or lock you into any minimum fee amounts. Therefore, if you are an online-only businesses, picking between the two from a price-standpoint isn’t a big differentiator.

Stripe has no offline credit card processing, so if you want to have a single processor for retail and online solutions you must go with Square. There is currently no word from Stripe as to whether they are anticipating a launch for physical processing. However, given the fact that Square only launched their e-commerce platform recently, we may soon see Stripe do something similar for retail processing.

Stripe Highlights

  • Online only
  • No monthly fees
  • 2.9% + $0.30 per transaction

Square vs Helcim

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If your business has over $17,647 in monthly card transactions, Helcim may be the better credit card processor. Helcim is a more professional suite of merchant services and comes is cheaper for retail processing. However, there can be more overhead costs tied to Helcim. The biggest one is its monthly fee. You must pay $12 per month for retail and mobile credit card processing and $25 per month for e-commerce solutions. Unless you are processing a large of transactions every month, paying the monthly fee isn’t worth it.

If you are after predominantly an e-commerce credit card processor we recommend Square over Helcim. Square is cheaper at processing online transactions at low volumes. It charges 2.9% + $0.30, instead of the average 3.05% you pay with Helcim. That is not even mentioning the $25 monthly fee you pay with Helcim’s PCI Program that comes bundled in the e-commerce solution.

For more information on Helcim, check out our review.

PayPal Highlights

  • Monthly fees between $12 and $25
  • Per-transaction fees range. Average 2.61% + $0.12 for retail
  • More expensive than Square for online credit card processing