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Review of Square Merchant Services

1455 Market Street, Suite 600, San Francisco, CA 94103

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Square, Inc. provides small-to-medium size businesses the ability to immediately plug into a credit card processing environment. This company is a bad choice if you want stability or immediate help for emergency issues.

Square, Inc., based in San Francisco, has exhibited amazing growth since its inauguration in 2009. Square is a merchant services aggregator and mobile payment and financial service business that began its journey by marketing to small home-based businesses and mom-and-pop stores. Since 2012, Square has moved into several new ventures that make its services viable for larger businesses. Their swiper, the Square Reader, can turn an iPad into a sleek cash register, and it also is very mobile for those entrepreneurs who want to use it with their mobile phones for POS transactions.

Although complaints abound about this product, Square has become a heavy hitter in merchant services, allowing businesses and individuals to take credit cards for products and services with a simple setup process, zero setup cost, and no monthly fees. Jack Dorsey, Twitter's co-founder, created this product as a Payment Service Provider, which means that Square allows merchants to send transactions through a single merchant account. This process reduces all expenses except the transaction fee. But, I learned that this ease of access can also create some issues that could hurt the merchant.

Detailed Review

Below is a detailed review of Square Merchant Services offering. The review is broken down into the following categories.


Depending upon the type of business you own, some of the following features may or may not be important to you. To learn more about any given feature, just click on it.

Square, Inc. started in the U.S., but has expanded to Canada and Japan recently. I'm fairly certain that we'll all see more growth from this company over the next few years, especially since Square now has a "global" option in their Help Center.

Software Compatibility:
Intuit Quickbooks Yes
Sage 50 No
Microsoft Dynamics GP No
Hardware Compatibility:
Windows / Blackberry No
iPhone / iPad Yes
Android Yes
Alternative Transaction Types:
Phone Orders Yes
Internet Orders Yes
Wireless Orders Yes
Mobile Orders Yes
Snail Mail Orders Yes
American Express (AMEX) Yes
Add Tips to Bills Yes
eCommerce / Shopping Cart Yes
International Sales Yes
Recurring Payments No
EMV Chip Cards Yes
Contactless Cards Yes
Loyalty / Gift Cards Yes
eChecks / Electronic Checks Yes
Welfare Benefits (EBT/SNAP/TANF) No
Security / Fraud Prevention:
AVS Fraud Protection Yes
PCI DSS Secure Transactions Yes
Industry Specific:
HIPAA Compliance (Healthcare) Yes
Trust Account Debiting (Legal) No
Fleet Cards (Petroleum) No
Online Menu Orders (Restaurants) Yes
Countries Served:
U.S. Yes
Other Countries Canada, Japan
International No

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Almost Every merchant account services company uses either Interchange Plus or Tiered Pricing (read more about this topic here). Where companies allow us to disclose pricing information, we show the deals that our secret shoppers were able to achieve. When companies offer both Interchange Plus and Tiered Pricing, we try to get a quote on both options.

Our Experience:We didn't need to make a phone call, as Square is upfront with all their pricing on their website. Interestingly, Square doesn't buy into the Interchange Plus or the Tiered Pricing. Their headline reads, "Clear pricing, no surprises." Hopefully, they're correct, but we'll see when we get to the Fine Print later...

Flat Fee Pricing

  • Swiped Transaction: 2.75%
  • Manual Transaction: 3.5% = $0.15

There are no monthly or annual fees, no FANF or PCI compliance fees, no 1099-K fees or gateway fees. In fact, if you want to open an online store front at Square, that setup is free and all transactions are 2.75%. Although this transaction fee is higher than normal, look at the amount you can save by not paying other fees normally charged by account service companies.

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Contract Fine Print

The more we learn about this company, the more we like its simplicity. Square's "fine print" is actually rather large and the company prints all its legalities online so you have access to it at any time. Here's a rundown:

Fine Print Fees:
Termination Fee None
Setup / Application Fee None
PCI Compliance Fee None
PCI Inaction Fee None
Gateway Fee None
1099-K Fee None
Statement Fee None
Online Reporting Fee None
Monthly Minimum Volume Fee Yes
Accept International Pymt Fee None
Voice Authorization Fee None
Monthly Min. Process Fee None
Daily Batch Fee None
ACH / Direct Deposit Fee None
ACH Charge Fee None
ACH Return Fee None
FANF Fee None
Chargeback Fees None
Mobile Swiper & Mobile App
Online Reporting through the merchant's online Square Dashboard
Phone and Email Support
Offline Mode for Payment

Our Take: Although this fine print seems too good to be true, look again at the per-swipe or key-in transaction rate. That interest rate covers a lot of territory, especially the risk that Square takes in accepting entrepreneurial spirits into its folds. In previous years, just about anyone could sign up for a Square Reader and an account. Now, Square at least asks for the last four digits of your Social Security number. In the fine print, you learn that you - as a Square user - may receive an unexpected visit from Square staff to make sure you're legit if you own a brick-and-mortar establishment.

The cost of being an easy-to-use product with no credit checks or underwriting means that Square is taking on a higher level of risk than most traditional payment processors. This is where you'll see the complaint levels rise, because Square is notorious for holding funds and shutting down accounts that appear suspicious. You can trigger Square's paranoia with an inordinate number of chargebacks or with higher-than-normal sale or sales averages.

For instance, if you usually sell vintage items for under $25.00 each and then you decide to sell a vintage car for over $75K, you might present a risk for yourself and for Square with that larger-than-average sale. Square may look at that $75K sale and think "drugs, guns, or pornography" and they may close your account. Plus, you may turn blue holding your breath waiting for Square to release your funds.

The best way to make friends with Square is to keep using the Square Reader on a regular basis if possible, open up a storefront for visibility, be consistent with your sales items, and become pals with your Square Dashboard.

Finally, many of Square's services are free to use for the registered merchant, but they've partnered with third parties for other services for the merchant's inventory and accounting. Square has partnered with apps such as QuickBooks, TaxJar, and Stitch Labs, and Square makes it perfectly clear in their legal terms that they are not responsible for your transactions with these third parties. Those apps are not free, but it's up to you whether you want to use them or not.

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Square Reader

While your transactions usually take place electronically, the actual device that you use to swipe a customer's card is referred to as "the equipment." This equipment includes hardware and, often, software or apps for that hardware to function properly.

According to legend, Dorsey initially named the company "Squirrel," a name that isn't quite as sexy as "Square." Square refers to the shape of the card reader and also refers to a term for settling debts, "squaring up." The Square reader is just one of the hardware and software products this company offers, and it is the only product they offer for free along with the software app required to run the swiper.


  • Square Reader: This free white square swiper was Square's first product, geared to accept credit card payments via a mobile device's audio jack. The Reader uses strong encryption, including SSL and PGP, and card numbers, stripe data, and security codes are not stored on Square merchant devices. The Reader's technology also is PCI compliant and Verisgn certified. Merchant must download Square Register software for the swiper to work.
  • Square Stand: Square unveiled its Square Stand in 2013. This stand turns an iPad 2, iPad 3rd-generation, or iPad Air into a sleek POS register that can replace the traditional cash register. The Swivel Square Stand does just that - it swivels so customers can sign and tip. Comes with a kit for the merchant to use to lock the iPad in place and secure the stand to a counter.
  • Accessories: Square offers receipt printers, kitchen printers, cash drawers, and bar code scanners.


  • Square Register: The free Square Register software is required to use the Square Reader. It replaces the traditional cash register, and you can send invoices straight from the mobile device without payment on the front end.
  • Square Feedback: Merchants can interact with customers who leave feedback through this software. Managers receive alerts when customers leave feedback, and the merchant can respond through the Square Dashboard online at the website.
  • Square Inventory: This feature allows merchants to import thousands of products quickly with CSV spreadsheets, download reports, and receive stock alerts. Square partners with Stitch Labs for one inventory option or you can build your own custom inventory through Square Connect API. If you feel uncomfortable with building your own software, you can hire a Square-preferred developer to help.
  • Square Market: Square, Inc. launched Square Market in 2013. This marketplace allows sellers to create online storefronts with online payment functions. This area currently is the only option to take payments online.
  • Square Cash: Square also launched their Square Cash app in 2013. This software enables person-to-person money transfers via email, and the money is deposited in a bank account within seconds.
  • Square Order: In 2014, Square introduced Square Order software, which enables merchants to sell online to customers who will pick up the merchandise. This app has limited availability as it rolls out.

As a side note: Square just introduced their (PRODUCT)RED card reader, a red square. A $10 donation for this produce "can provide more than 24 days of life-saving pills for someone living with HIV in Africa."

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Countries Served

Square can handle payments from and for merchants in the United States, Canada, and Japan, but they do not support payment card processing outside these countries or in the U.S. territories of Puerto Rico, Guam, U.S. Virgin Islands, Northern Mariana Islands, or American Samoa. Also, cross-border card payments remain unsupported, but merchants can accept cash transactions while travelling internationally. Merchants in the U.S., Canada, and Japan can process international cards within the country where the Square account originated.

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Contract Length / Termination

I generally don't like long-term contracts or termination fees in merchant services agreements, because the ability to cancel keeps the credit card processor on its best behavior, including the willingness to make you happy if there's a dispute. Plus, this ability to cancel gives you the ability to move on if you find a better deal.

Square's termination policies are flexible, with no charges and with month-to-month terms. You can terminate at any time as long as you don"t terminate your contract to avoid payout fees for services you purchase. You also need to wait to terminate once all your orders are filled, otherwise Square will terminate those pending orders. I felt this was a very simple and reasonable termination policy, but it works both ways with Square...

Square may decide to terminate you, the merchant, at any time. Mostly, that termination (or suspension) would come without any reason or notice (this information is in the fine print). If you have funds in your account and if Square feels you have violated any terms of their agreement - mostly through "false, incomplete, inaccurate, or misleading information or otherwise engage in fraudulent or illegal conduct," you are out of luck.

While this provision seems reasonable to us, I feel that the inordinate amount of complaints about Square holding funds means that Square is overly paranoid about their users' activities. As we mention above in the fine print section, it's best to be up front about your activities and be visible to Square for your own track record and safety.

Finally, we learned that Square has beefed up its support staff. Although this staff may not have authority to handle disputes, you can remind them that Square's agreement #50 is that Square is dedicated to resolving any disputes quickly, and if they cannot be resolved, that they "agree to an informal and inexpensive dispute resolution process requiring individual arbitration." You might think about obtaining an attorney before you use this product.

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About the Company

The merchant account services industry is multi-layered. Understanding how those layers fit together can be confusing (Read More in this Article). A good thing to know, however, is whether or not your company is a direct processor (good if yes) or, if not, then to know who they process with and whether or not that processor is reliable. The second thing to know is whether or not the service or sales staffs are in-house or outsourced. In-house staffs are preferable for you, as these staff members may have more access to sources that can resolve your issues.

Processor: Square, Inc. defines its business as a "payment service provider" that facilitates payment processing. In other words, Square is a middle man, or aggregator, that acts between you and all the credit card companies and banks that you might do business with in your role as a business owner who uses Square. Their processor is Chase Paymentech and JP Morgan Chase is Paymentech's acquiring bank.

Account Service: Perhaps the inordinate amount of complaints against Square's services prompted Square to beef up both their in-house service and their online help center. Try the online center first for issues, because we found hundreds of well-written and easy-to-follow instructions there. If you can't find information at the Help Center, you can contact Square through a contact form, Twitter, Facebook, or by phone. In all cases, you may stand in line or get a ticket number for your phone request. Phone requests are Monday through Friday, 6am to 6pm PST.

Account Sales: Who hasn't heard about Square? This tool seems ubiquitous, despite the fact that we can't seem to find a sales department. Their site is probably one of the most transparent I've seen, and the Help Center answered all our questions about the product.

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Customer Service

As part of our review process, we try to test merchant account service companies' claims by placing test calls and working through the customer service process. In this instance, we learned that you must be a registered user to place a phone call. Instead, we sent a test email, and we received a response that same day from an agent who seemed eager to respond to our request.

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Common Customer Complaints / Our Verdicts

We scoured the web to find past and current customer complaints about this processor. Then, we investigated those complaints that seemed legit, and provide our verdict on how well the processor handled the issues. For Square, there was an inordinate amount of complaints about account stability and holding funds. Other issues included poor customer support and some malfunctions.

Holding Funds:
Customer Complaint:

We were impressed by the number of complaints about fund holding, suspended accounts, and account stability.

Our Verdict:

Read the fine print. Square takes on a huge risk when it accepts anyone without a credit or background check. That said, I don't feel it's unreasonable for Square to instigate some investigation on the front end to mitigate their paranoia about shady deals. Those banned products and services are clearly outlined in their user agreement; but, for legit small businesses, Square's ability to shut you down without notice is a hefty risk, too.

Poor Customer Support:
Customer Complaint:

We've seen a little tapering off of these complaints, but they still exist.

Our Verdict:

I think the reduction of complaints in this area might be because Square has beefed up its support team. Still, we don't know how far we can take an issue such as a dispute. This ability to dispute a transaction is a consideration for any business owner.

Customer Complaint:

Some complaints about the Square Reader not working or having to swipe a number of times for it to work. We've also seen some reports of crashes.

Our Verdict:

We talked with a few merchants who use Square as home-based entrepreneurs and as brick-and-mortar businesses. They all feel that these issues could come with any credit card processor. The deal with Square is that they are upfront in their user agreement about this very can happen. One merchant said she experienced card issues only when wireless was spotty, so she couldn't place blame on Square.

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Who Should / Shouldn't Use this Processor


  • Startups: Square is great for businesses that cannot afford other processors or that want to start accepting card slowly and simply.
  • Small Businesses: If you can't afford a merchant account with monthly fees and other complications, Square offers simplicity and transparency.
  • Delis, coffeeshops, and other small food services: These operations can find a home at Square. Square has taken on Whole Foods' delis and also is working with Starbucks to take debit cards. Square likes the food industry.
  • Merchants who don't mind overt percentage per sale fee: This is a trade-off, especially when no other charges are accrued.
  • Mobile Sales Only: This solution is perfect for any merchant who wants a simple and easy-to-use solution for mobile sales or for small-ticket items.


  • High-Risk Businesses: Any merchant who doesn't want to take a risk of suspension or termination without notice might look at our processors for high-risk business transactions.
  • Non-Detailed Business Owners: Any merchant who would trade trendy technology for a low-risk and simple processing environment.

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Square Merchant Services
Customer Service
Customer Reviews
2.75% - 3.5%
  • No Monthly Fees
  • Offer an iPad Register
  • Android Compatible
Monthly Fees Breakdown
Setup Fee$0.00
Monthly Fee$0.00
PCI Compliance Fee$0.00
Online Reporting Fee$0.00
Batch Fee$0.00
Gateway Fee$0.00
Chargeback Fee$0.00
Termination Fee$0.00
Contract LengthMonth-to-Month
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DISCLOSURE: Advertising, Affiliate and Conflicts of Interest: Merchant Negotiators accepts advertising via the Google Adsense platform, directly from advertisers, and has common parent ownership interests with other payments related companies leading to conflicts of interest. Read our Affiliate / Conflicts / Advertising Disclosure for a more detailed disclosure.

About the Reviews: These reviews, and for that matter any reviews, are inherently subjective, and should be regarded as our opinion, not as a statement of fact. Selecting a merchant services provider is an important decision, and we urge you to use no single source of information as the basis of that decision.

About the Pricing: This pricing is an estimate based on limited available information. In some cases, the Processors' pricing information was provided directly by the company, in others, we obtained it from public information, through calls to the company, or through past or current clients of the company. Where, despite these efforts, we were unable to obtain any information about certain fees, we used estimates based on similar providers in the industry. While we're working, in some cases, with the company directly to get more accurate pricing, even in those circumstances, we can't guarantee the pricing's accuracy. Complicating all of this, is that for some companies individual salespeople are given authority to modify terms on a deal by deal basis. In any case, if you know of an error, please let us know and we'll fix it.

About the Calculations: With respect to your estimated savings, this is based on a lot of factors and some hard math. The reason we do it, along with the "Actual Gross Rate" calculation is that every Processor prices their product differently (e.g. interchange v. 3 tier v. 4 tier v. flat v. membership, etc.) and some make it intentionally complicated or opaque. Trying to convert their pricing structure to a consistent "Overall Cost of Processing" is the only way you, the merchant, can do an apples to apples pricing comparison and know whether an offer is actually a good deal. Our system isn't perfect but we're trying.

Conclusion: In sum, these rankings, ratings, and scores are inherently subjective, and should be regarded as our opinion and not as a legal statement of fact. Moreover, use these prices and estimates at your own risk, and make sure to verify the pricing you see here in any formal contract you receive. Finally, if you do find something wrong in our pricing, terms, etc., tell us and we'll try to fix it. is now offline.

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