What is square? How it works and why small businesses love it

Square is a mobile payment company that offers a suite of merchant software, point-of-sale (POS) systems, payment hardware products, and services for small businesses. Unlike most payment processors, Square is available to businesses of all sizes and offers the most comprehensive free POS system on the market. The Square Payment and POS app has been downloaded more than 33 million times and has more than 2 million active sellers.

Should you use Square?

We’ll go into more detail about specific Square products below. But overall, for any small business processing less than $120,000 per month, Square is the best POS and payment processing solution because it has no fixed monthly costs and offers incredible value with the free POS system. Visit Square to create your free account.

visit square

Square Services: Why Small Businesses Love It

Square is the original mobile payment processing and card reader app. When it was first released, it had high adoption rates because it allowed businesses to accept card payments anywhere instead of having to rely on cash or peer-to-peer payment apps. It also eliminated the complex contracts and long-term commitments required by many commercial services.

Unlike most credit card processing companies, Square does not require an application or approval process and has no monthly fees or minimum requirements. Every free Square account comes with three main features: payments, POS software, and online ordering.

How does Square work?

Square starts with simple, flat-rate payment processing including credit cards, contactless payments, and ACH transfers. It then offers various products within its ecosystem that work together to form a complete small business management solution. However, some of the solutions, such as Payroll, can be used independently.

Square continues to add to its small business offerings, from software enhancements to new systems (like a kitchen showcase system) and, most recently, banking services.

square products

Easy, flat-rate payment processing

You can use Square to complete credit card transactions online, in your physical store, and on your mobile device when you’re on the go.

Square charges a flat fee per credit card transaction. This means that the fees from the credit card company, the customer’s bank, and the merchant’s account processor are all included in one flat fee. This is regardless of the type of card you are processing. The only differences in the fees are whether or not you have to enter the numbers.

Square Payment Processing Fees

The advantage of this pricing model is its simplicity. You don’t have to worry about figuring out how much you’re paying in credit card processing fees because you know exactly how much you’re going to pay in advance. It’s the same flat rate no matter what type of card your customer uses.

Top Rated Business Services

Square’s affordable and easy-to-use payment processing is one of the best merchant services available for small businesses. In addition to mobile and in-store payments, each free Square account comes with a virtual terminal, billing, online payments, and tools to monitor and dispute chargebacks.

News from Square

Free and Low Cost Point of Sale Software

In addition to great merchant services, Square also offers free POS apps that can be downloaded to iOS and Android smartphones and tablets or used with one of Square’s proprietary hardware products. The free and easy-to-use app has an offline mode, making it suitable for both mobile and in-store sales.

In addition to the standard free Square POS app, Square offers free and paid POS software subscriptions for retail, restaurant, and appointment-based businesses. Each POS software product includes payment processing, inventory management, basic employee management, customer relationship management (CRM), reporting, analytics, and industry-specific features.

For example, in November 2020, Square added a Kitchen Display Solution (KDS) with detailed ticket views, timers, alerts, options for different prep stations, and an Expeditor mode.

Click the tabs below to learn more about each Square POS offer.

hand pointing to a square point of sale

Square POS is a free, general-purpose POS system that allows you to process sales, track inventory, manage customers, and view reports. It works on any iPad, iPhone, Android device, and Square hardware. It is best for individuals and small businesses on a budget. Read our full Square POS review to learn more.

Square for retail point of sale on a table

Square for Retail has a barcode-based user interface that allows retailers to easily record transactions, manage orders, and track inventory. It also syncs seamlessly with Square Online for e-commerce and pickup orders. It has a free plan forever and a Plus plan with advanced inventory tracking, analytics, and team management. Read our Square for Retail review to learn more.

Plaza for Restaurants POS on top of a table

Square for Restaurants enables businesses to manage front-end and service operations, including menus, floor plans, internal customer orders, online ordering, and kitchen displays. There’s a free plan forever and a Plus plan that offers better front-end and team-management tools. Read our Square for Restaurants review to learn more.

Appointments Square point of sale on top of a table

Square Appointments is similar to Square POS but with the added functionality of a full appointment management tool. Manage client booking for yourself or your employees, allow clients to book online and automatically send confirmations via email or text message. Integrated payment processing means you can request a card on file for each customer. Read our Square Appointments review to learn more.

Free Online Ordering Website Builder

Square Online is the third free solution that comes with every Square account. It is an easy-to-use site builder that can be used to create a business website or a basic e-commerce site or to add online ordering or pre-order functionality to your business. You can also use Square Online to book appointments online.

It includes a variety of templates for stores, restaurants, events, appointments, and other types of businesses. It automatically syncs orders, inventory, and customers with your POS and can be used to process curbside pickup, shipping, or local delivery orders.

business management solutions

In addition to Square’s three free merchant tools: Payments, POS, and Online Store, Square offers a variety of merchant management solutions that can be used as a stand-alone tool or in conjunction with any of Square’s other products. One of the benefits of using Square is that businesses can mix and match the solutions they need to create the best setup for their needs.

Some of the more popular solutions include:

  • Payroll Square: Track time, pay employees, manage benefits, and automatically file tax forms. Read our Square Payroll review to learn more.
  • square capital: Square offers small business loans up to $100,000. This is only available to Square sellers, but comes with fast approval and fast financing without a hard credit check.

Square also has paid plugins for email and SMS marketing, team management, customer loyalty programs, and advanced online sales.

square bench

The company has taken the next logical step in its business services with Square Banking. While Square, Inc. is a financial services company, not a bank, these services are provided by Square’s banking affiliate, Square Financial Services, Inc. or Sutton Bank.

Offers business checking and savings accounts, along with the small business loans mentioned above. Your revenue from Square sales can flow directly into accounts, giving you greater access to your funds.

Square banking comes with no overdraft fees, no minimum balance, no initial deposit, and no account fees, so it’s a no-brainer for businesses using Square. Savings account earns 0.5% APY. Like other banks, Square has debit cards. Allows for automated payments, including business loan payments through Square Capital.

Bottom line

Square has become the go-to solution for pay-as-you-go flat-rate payment processing. Each year, Square continues to enhance the features of its free POS software, including solutions designed specifically for retail stores, restaurants, and appointment-based businesses like salons, in addition to its generic POS for small businesses. Even more, it offers business tools from payroll and marketing to banking. Overall, Square is one of our favorite small business solutions. Visit Square to create a free account.

visit square

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