Square – Mobile Credit Card Processing For The Masses

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square 3d logo   Square   Mobile Credit Card Processing For The MassesSquare is a growing mobile credit card provider that makes it “easy” to accept credit card payments from anywhere you have a phone (iPhone or Android) and an internet connection. Who might use a service like Square? Any time you might want to accept payment for a product or service – maybe you sell crafts at a craft fair, want to have a garage sale or offer a service for which it would be helpful to offer credit card processing. Square can be used in many of these situations where only cash or check have been viable options previously.

Currently limited to the United States, Square requires a U.S. bank account, social security (or tax ID number if you are a business) and a U.S. address to sign up for an account.


Anyone, even individuals not associated with a business, can sign up. If approved, you do not need any hardware to begin taking credit cards. If you do not have the Square reader, you will have to type the credit card number into the app – and you also pay a higher transaction rate. The reason the rate is higher is because these are considered ‘card not present’ transactions since you do not have the information on the magnetic stripe to prove you actually had the card.

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nurit 80001 e1289151910582   Square   Mobile Credit Card Processing For The MassesThe drawbacks to traditional wireless credit card machines, pictured at the right, are:

  • Big, bulky
  • Expensive, a few hundred dollars to purchase
  • Monthly Wireless Maintenance Fees

Square aims to eliminate all of these drawbacks while also adding a very slick interface. Let’s run through a sample transaction through the Square interface.

The Square reader plugs into the headphone jack of an iPhone, iPad or Android device. These are the only three devices that support the Square platform at the present time.

square reader   Square   Mobile Credit Card Processing For The Masses

You have 3 options for payment. The first is to take a cash transaction, in this case Square acts as the “receipt” and will list in your control panel as well as optionally email a receipt to the payee. Square does not charge for this service. The second two are both credit card transactions. The difference is whether you swipe the card via the square reader (provided by square for free) or if you type it in manually.

square 1   Square   Mobile Credit Card Processing For The Masses

Once you plug in the square reader you simply swipe the card, type in the amount and optionally a description of what the transaction is for, and press ‘Charge.’ It will then approve or decline the transaction and move to the next screen where your payer will sign their signature with their finger.

square 2   Square   Mobile Credit Card Processing For The Masses

Finally on the next screen, you have the option to have a receipt emailed to the payee. This email receipt includes the details of the transaction as well as the merchant’s (your) address.

Compared to traditional mobile credit card processing machines, the process from the perspective of both a merchant and a client is a true breath of fresh air. Square makes the process easy and is extremely transparent with their fees, which is also a break from my experiences with traditional credit card merchant accounts.

As you can see on the online receipt below, Square breaks down each transaction and clearly states how much money will be deposited to your account, and how much in fees were deducted from your transaction. Their fees, as of this article’s publishing date, are 2.75% + 15¢ for card-present transactions (swiped via the Square reader), and 3.5% + 15¢ for typed in transactions (see their features page for current rates).

square merchant receipt   Square   Mobile Credit Card Processing For The Masses

As you can tell from my experiences so far, I am very impressed by Square. But who would benefit from using Square? Essentially, it opens up the world of credit card acceptance to ‘normal people’ and not just businesses, although businesses who already accept credit cards can also benefit from their low rates and minimums.

If you are an individual, you can now offer credit card processing to anyone whom you would typically only take cash or a check from. Of course, you are paying a percentage of the transaction to Square, but in some cases it is worth the fee to get ‘immediate’ payment rather than a future promise of payment.

For businesses, it gives you an easy portable solution for accepting credit cards. However it does lack a few features that many normal merchants have. An API to accept payments via a website is notably lacking. Also, I suspect if you are a heavy volume credit card processor, the long term reliability of the reader + headphone jack solution may be less than optimal.

That all being said, Square has the possibility of absolutely revolutionizing the credit card processing industry. The ease of use and transparency of fees are something that is refreshing in the sea of other credit card merchants.

Let us know if you have used Square and what you think of their services. Everything seems to be positive from my testing but please share your experiences with our other readers!

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10 Comments - Write a Comment

Reply

Donna

Merchant Processing Services has excellent customer service, no contracts or cancellation fees and very reasonable rates. I have never had any issues with them, and plan on keeping them as my processor for a very long time. My sales rep was Great! Call at (877) 877-9592.

Reply

Andrew

I signed up with Square before they started shipping the free card swipe device. Signup was quite easy as was the download and installation to my Android phone. Test transactions with manually entered cards went without a hitch. Once I received the card swipe device then the world of easy credit card transactions really opened up.

For example, I volunteer with several non-profit groups. Recently one of the groups held an event with a raffle. Traditionally ticket purchases have been cash only. However, I offered to take credit cards and we sold $150 worth of raffle tickets that we otherwise would not have sold. Plus, I was able to transact entry fees on-the-spot for impromptu entries. Purchasers can choose to receive an e-mail receipt, which we can also use to keep in touch with them in the future. If you have GPS turned on then patron’s receipts also have a Google Maps link where to where the transaction took place. As I work with more than one organization, it’s important for me to keep the deposits straight. With Square, I can enter a “Device Name”, which I use to enter the organization’s name to which the funds should be forwarded. It shows clearly on my receipts. Also, I can enter on each transaction a “Note”. This can be used for any free-form text entry; such as to describe the item or service purchased. And one very cool feature is that you can take a picture of the item being sold and it will be automatically attached to both your receipt and the patron’s receipt. (A great feature for seller protection.)

Square’s rates beat most rates offered by credit card gateways. Costco is the only one I’ve seen that comes close to as good a deal, but Costco is not near as handy for the casual user. For ease of setup and use, Square beats everyone – hands-down.

I’m sold on Square. The only drawback I’ve seen is entering a signature. Entering with a finger is ackward for most people. I purchased a capacitive stylus, but it’s not a whole lot better; that is, it gives about as good a signature as you get with those painful signature pads in the supermarket.

I suggest to anyone that does crafts, holds garage sales, etc. to be proactive and get one now. The wait time for the card swipe device can be substantial. Yet since the service is free, unless you use it, the is no reason not to sign up today.

Andrew

Reply

Scott

I used Square for the first time yesterday. The charge was for $3560.00. After their take the deposit amount would be $3,461.95. Everything went seamlessly until I get an email after the transaction stating that I would not have the money in my account for 1 month! I emailed a complaint to Square expressing my “anger” and quickly got an email for stating “We just initiated a credit in the amount of $1,001.00 to your Broadway National Bank account. The funds should be available in 1–3 business days”.
What?!?!?!?
I really thought that Square was a good idea for may business. I was wrong!

Reply

Dave Drager

If you read their fine print they say that you are initially able to withdraw up to $1000 a day, I believe. This is in an effort to reduce fraud. This is the same thing that any other credit card processor will do. You are initially set a transaction limit and you can not exceed that amount per day.

Imagine it from Square’s perspective. I’m assuming your charge is legit, but what is stopping someone from signing up with Square, stealing a credit card # or card, and swiping $5000 from an account? I don’t think it is expected that they would deposit that amount directly into your account on the first day. Limiting it to $1000 limits their outlay in case of fraud.

I’m sure if you are a business who regularly does higher volume transactions you can contact them to have those limits lifted – they are put in place to limit fraud but they are usually adjustable.

Reply

Scott

I used Square for the first time yesterday. The charge was for $3560.00. After their take the deposit amount would be $3,461.95. Everything went seamlessly until I get an email after the transaction stating that I would not have the money in my account for 1 month! I emailed a complaint to Square expressing my “anger” and quickly got an email for stating “We just initiated a credit in the amount of $1,001.00 to your Broadway National Bank account. The funds should be available in 1–3 business days”.
What?!?!?!?
I really thought that Square was a good idea for may business. I was wrong!

Dave Drager

If you read their fine print they say that you are initially able to withdraw up to $1000 a day, I believe. This is in an effort to reduce fraud. This is the same thing that any other credit card processor will do. You are initially set a transaction limit and you can not exceed that amount per day.

Imagine it from Square’s perspective. I’m assuming your charge is legit, but what is stopping someone from signing up with Square, stealing a credit card # or card, and swiping $5000 from an account? I don’t think it is expected that they would deposit that amount directly into your account on the first day. Limiting it to $1000 limits their outlay in case of fraud.

I’m sure if you are a business who regularly does higher volume transactions you can contact them to have those limits lifted – they are put in place to limit fraud but they are usually adjustable.

Lizzykingwill

Make that $1001 a month. I used Square for a deposit of $1300 the first week of January. They deposited $1001 into my bank account within days. However the balance will not be available to me until the same date in February. Subsequent deposits since the first one are building up in “my” account with Square until February too, since I already got my limit of $1001 for January!! They are certainly not paying interest on the almost $800 they are holding in “my” account with them. If I were to let my clients charge any more through Square, they money would continue to be held until sometime in February. I am assuming that once I hit that $1000 amount again, while I would get $1001 in February they would piggybank more than that to be paid to me in March. I have asked to have my account limit increased. However, after an initial email. I have not heard from them again. I am a very small (me) business, working on a cash basis. I cannot afford to have this money held. Even small business rack up more than $1000 in sales a month. What a sweet deal for them to hold excess funds interest free. I wish I had thought of this banking enterprise. I wish them well but will not use Square again until my account is upgraded or those funds clear in February. e

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SANTANGELO4

HOW DO YOU CONTACT SQUARE? DO YOU HAVE A NUMBER?

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