Square Review

1,536 Replies

Credit Card Processors
Square Logo
Category Breakdown
Sales & Marketing rated A
Costs & Contract rated B plus
Complaints & Service rated C
BBB Rating rated C

Square Rating

"B" Credit Card Processor Rating

Square Overview

Unlike most Square reviews (squareup.com & square.com), this Square Up review primarily covers the topics that matter to most merchants and small business owners rather than Square’s technology. Square is often called “Square up” or “Squareup” because of the domain that Square uses for its website; however, the official name for this company is “Square.” For the purposes of this review, the two names will be used interchangeably.

Founded in February of 2009 by Jack Dorsey, who is also the founder of Twitter.com, Square has seen tremendous growth in a very short amount of time. Much of the company’s success can be attributed to the fact that Square has ingeniously broken the mold of credit card processing by removing the traditional barriers-to-entry that restricted processing services to actual businesses and bringing credit card acceptance to the individual, or essentially anyone and everyone.

Signing up for the company’s payment processing service is simple: iPhone, iPad, and Android users simply fill out a quick form, download the Square app, and then await the arrival of the Square Up reader in the mail. They can also purchase the reader at several nationwide retailers. The Square credit card reader plugs into the headphone jack of the phone or tablet, thereby making it a mobile credit card terminal. In fact, Square’s model has been so successful that it has inspired numerous clones from both big name competitors and fledgling startups.

Related: Best Card Processing Apps for iPhone

Other Square Services

Since the launch of its card reader and mobile app, Square has rolled out several other payment services for both business and personal use.

Square RegisterSquare Register is a point-of-sale (POS) system that provides extra features not included in the company’s mobile app, including analytics, sales reporting, staff management, and a customizable item library. The service, which is free to download and optimized for the iPad, also allows merchants to set up loyalty programs and send digital receipts.

Shopping cart with a mouseSquare Market is an online store directory for Square merchants. Merchants with an existing Square account can create an online profile for their store within the Square marketplace for free. They may then sell their products through the Square market for the usual rate of 2.75% per transaction.

Square CashSquare Cash is a direct peer-to-peer cash transfer service that is linked to a user’s debit card. Square Cash sends payments via email and smartphone and allows for free transfers of funds between users. The service is not targeted at business owners, but they may use it to make payments outside of a business setting.

merchant cash advanceSquare Capital is a merchant cash advance program that can be activated from the dashboard in the Square Register. Square Capital allows merchants to receive a large upfront cash amount and then pay that total back to Square over time with a fixed percentage of their daily credit card sales.

Square has also recently launched an order-ahead app called Square Order, an online invoicing feature called Square Invoices, an online scheduler called Square Appointments, and an offline processing mode that enables merchants to capture payments even when their internet is down.

Related: Find The Best Processor For Your Business Type

Sales & Marketing | A-

Key Points – Sales & Marketing
Uses independent resellers? No
Promotes deceptive rate quotes? No
Discloses all important terms? No

Square differs greatly from traditional credit card processors in terms of how it markets and sells its service. Where most merchant account providers utilize poorly trained outside independent agents who are focused on setting high fees in exchange for big commissions, Square relies mostly on online marketing and partnerships with retailers and cell phone service providers, most notably partnering with Starbucks in 2012. Nearly all of Square’s customers sign up directly through the homepage of the company’s website or by purchasing a reader at a store with a mail-in rebate covering 100% of the cost. Square has also benefited from an enormous amount of online buzz and word-of-mouth promotion.

Square markets its pricing with a straightforward and easy-to-understand message (covered later in this review); however, the company fails to mention anything about its account cancellation and risk mitigation policies in its marketing materials and advertising placements. These policies have been reported to cause significant problems for many merchants, and some have even complained of large financial losses. Due to the importance of these policies, and the fact that Square allows merchants to run transactions that may trigger account cancellation without any prior warning, many merchants have complained of misleading marketing by the company. Hence, we have lowered Square’s grade in this section to a “A-” rating.

Square Marketing Example

Related: Find The Best Providers By Processor Type

Costs & Contract | B+

Key Points – Costs & Contract Terms
Swipe rate: 2.75%
Key-in rate: 3.5% + $0.15
Termination fee: None
Monthly minimum: None

The Good

One of the most appealing aspects of Square is that, unlike traditional credit card processors, Square credit card processing has only one fee: the processing fee of the transaction. There are no other fees that are typical of credit card processing, such as activation fees, monthly fees, gateway fees, PCI Compliance fees, downgrade fees, and early termination fees. Square has no additional monthly fees whatsoever as well as no monthly minimum processing fees or requirements.

Square now offers a single pricing option for all merchants: pay a flat rate of 2.75% for swiped transactions and 3.5% + $0.15 per keyed-in transaction. The company formerly offered a plan that included a flat monthly fee of $275 and 0% on swiped transactions up to $250,000 in processing per year, but this plan was discontinued as of February 2014.

Although the company’s transaction rate is higher than the “Qualified” rate of most traditional merchant accounts, it is comparable to the “Mid-Qualified” and “Non-Qualified” downgrade surcharges that about 80% of most transactions experience with a traditional merchant account anyway. The rate is, however, much more expensive than a competitive Interchange Pass-through rate pricing plan.

The Not-So-Good

Square does not verify the credit history of its customers prior to approving an account, so it sets a few limitations to avoid potential losses to fraud.

Square states that there is no limit to the amount of money that can be accepted per transaction or per month through its service – which is only partially true. Instead of setting processing limitations and denying transactions once a user reaches a limit (a tactic used by most other providers), the company relies on other methods to mitigate potential losses due to fraud. These methods allow merchants to accept an “unlimited” single transaction amount as well as “unlimited” monthly sales volumes, but with a catch.

Until November 2013, Square placed holds on funds of card-not-present sales for 30 days if more than $2,002 was charged within any rolling seven-day period. This meant that if a merchant keyed in $2,100 in sales within a seven-day period (either in a single transaction or in multiple transactions), the extra $98 ($2,100 – $2,002 = $98) would be held by Square for 30 days. This policy generated a lot confusion among users because Square did not provide any warning before the $2,002 limit was reached. Square now claims that merchants can process transactions of any type and any size without having to worry about a processing limit, but this claim is not entirely accurate.

The primary tactic Square currently uses to limit fraud is much less transparent than its previous rolling reserve policy and is the reason for the company’s low score in this section. Square appears to rely on undisclosed algorithmic “risk factors” to place automatic holds on transactions that it deems suspicious. The system appears to flag a high number of legitimate transactions and can cause serious problems for some merchants. Numerous complaints have surfaced that Square has randomly and without explanation, or notification, placed lengthy holds (exceeding 30 days) on their funds—even those that were swiped in-person. When a transaction is flagged, Square will either contact the merchant to obtain additional information about the merchant or the transaction, or it will simply deactivate the user’s account.

This deactivation allows Square to publicly claim that it does not hold its merchants’ funds because the withheld funds technically belong to “deactivated” Square merchants rather than “active” Square merchants. Square’s policies regarding fund holding and risk mitigation are very murky and make the service quite risky for higher volume merchants. It appears that the company needs to do a much better job of educating merchants about the types of transactions that could result in account deactivation. This includes issuing a warning prior to letting them run transactions that will be held, notifying when transactions have been held, and communicating with the merchant through the hold process.

In most respects, Square has very favorable pricing and contract terms for merchants. It has a simple signup process, no monthly fees or long-term contracts, and easy-to-understand pricing. However, sudden account deactivation can greatly impact a merchant’s operations, so the grade for this section will not quite enter “A” territory until Square improves its risk mitigation procedure.

Related: Best Processors For Quickbooks Integration

Service & Complaints | C

Key Points – Complaints & Service
Total complaints: Over 1,400
Live customer support? Active merchants only
Most common complaint: Fund holds

Another area that Square comes up short in this review is in its customer service. For a company that has only been around for a few years, Square is racking up a lot of complaints (over 1,400 in just our comment section below). The majority of the complaints fall into three areas: virtually nonexistent phone support, misunderstanding and nondisclosure of its former $2,002 card-not-present deposit hold policy, and reports of random fund holding or account deactivation exceeding 30 days with no explanation or communication from Square.

The company appears to rely too heavily on customer service provided by email, its support forum, and social media. This is a big drawback for many business owners, especially for those who are not willing to wait for a response through email, Twitter, or other social media channels. The company does have a newly launched customer support phone number (855-700-6000) that operates from 6 a.m. to 6 p.m. PDT, but merchants must request and receive a code from this webpage in order to actually reach a representative. Phone support codes are only provided to active Square merchants, meaning that any Square user who has had his or her account deactivated will still be unable to reach the company by phone. It is our position that deactivated merchants are the merchants who have the greatest need for phone support, so this customer support line is only a minor step forward for Square.

Regardless of how they contacted the company, merchants are reporting wait times of several days before getting a response from Square. Numerous users have also reported that Square has failed to respond to their support requests entirely. For many reviewers, it seems inexcusable for a financial services company this large to not have readily available live support for all of its users.

Square could greatly improve its rating in this section by allowing all merchants to access its customer support phone line and by better communicating its hold policies.

Related: Best iPad & Tablet Point of Sale Services

BBB Report | C*

Key Points – BBB Report
Product/service: 631
Billing/collection: 408
Advertising/sales: 46
Guarantee/warranty: 2
Delivery: 36

As of this update, the Better Business Bureau is reporting an “A” rating for Square despite 1,123 complaints filed in the last 36 months. This complaint total marks the first decrease in complaints (down from 1,168) that we have ever seen between two updates of this review, which may indicate that the company’s BBB complaint total is plateauing. Still, the number is up from 812 complaints as of our January 2014 update and 603 complaints as of our July 2013 update, and has skyrocketed from just a few dozen complaints since we first published this review in April of 2011. Surprisingly, the BBB has also raised Square’s grade from a “B+” in July of 2013 to an “A+” despite the rising complaint volume.

Of the complaint total, 631 are regarding problems with service, 408 with billing and collection disputes, 36 with delivery problems, 46 with advertising and sales issues, and two due to a guarantee or warranty issue. The BBB has also removed a note that it had posted at the time of our last update. The note stated that there were three types of common complaints: delays in deposit times, long funding holds ranging from 30-90 days, and difficulty reaching any type of customer support or getting issues escalated to a higher-ranking representative. Square has responded by quoting its Terms of Use policies and referring to the help section of its website. Square’s response remains visible. The company has successfully resolved 141 complaints, while the remaining 982 either were resolved to the dissatisfaction of the merchant or did not receive a final assessment from the merchant.

Due to the company’s high complaint count, rapid growth, and short time in business, we have adjusted the BBB’s rating to a “C” for the purposes of this review.

* Denotes CPO-adjusted BBB score

Related: Best Processors For E-Commerce

Bottom Line

Square Review

Rated 3.2 out of 5 Stars
Reviewed by Phillip Parker
Updated on 2015-10-07

Square is definitely on the right track with providing an easy credit card processing solution with no long-term commitments and no monthly fees. The service is proving to have some major drawbacks for higher volume merchants, though, because of murky fund holding policies and poor customer support. It appears that Square is best suited for individuals who have an occasional need to accept a credit card payment, such as babysitters and flea market vendors. The service does not appear to suit very well merchants that either have a high volume of credit card sales or that sell high-ticket items.

This review was originally published on 4/28/2011 and was last updated on 10/7/2015.

Leave your review of Square in the comment section below:


Top All-Purpose U.S. Processors

See The Top Canadian Processors

Copyright © CardPaymentOptions.com (Digital Fingerprint: 0d38c6720f0d78a701b74d58653af608). Getting paid to re-write this page? Click here to earn a reward.

Disclaimer: While the information in the above article is believed to be accurate as of its publish date, the author and publisher make no representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the contents. The author and publisher shall in no event be held liable to any party for any direct, indirect, punitive, special, incidental or other consequential damages arising directly or indirectly from any use of this material, which is provided “as is,” and without warranties. Any and all use of trade names and/or marks are for identification purposes only and shall not be construed as a claim of affiliation, or otherwise, with CardPaymentOptions.com, Inc. ("CPO") in any form. The sole purpose of the material presented herein is to alert, educate, and inform readers. It is not intended as legal or financial advice.


Leave a Reply

Your email address will not be published. Required fields are marked *

By submitting a comment on CPO you acknowledge acceptance of our Comment Policy. All comments are moderated prior to publishing. Comments containing ALL CAPS, contact information, profanity, or that lack a detailed account of your experience may be denied publishing or subject to redaction of the offending information.