How To Use Square To Process Credit Cards (2024)

Forbes Advisor Staff, Editor

Updated: Feb 13, 2024, 8:10pm

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Square is a cloud-based service-as-a-software (SaaS) solution that packs payment processing, online and in-person sales, invoicing, business management and much more into one streamlined, economical system.

You can use Square to process credit cards, plus accept an array of other payments, including automated clearing house (ACH) check payments, Apple Pay, Google Pay and Cash App Pay to name a few. Square also lets you accept payments anywhere. Its mobile and retail point-of-sale (POS) software supports in-person and in-store sales and online tools support e-commerce stores, online service providers, online invoices, keyed-in payments and more.

Square accounts have no monthly fees or long-term contracts, and you can cancel at any time without penalty. So, for most users, the only ongoing cost of using Square is your payment processing fees.

Square does offer paid add-ons, such as payroll, email marketing, and advanced POS systems for retail and food service. These add monthly costs but are still very competitive with other small business POS systems, especially when you factor in all the free tools Square delivers.

Square’s Payment Options

Square’s versatile payment system lets you process credit cards for all types of mobile, in-store, online and virtual transactions. However, that’s one of the many payment options that Square supports.

Here’s a list of the various payment options you can offer to customers when you use Square:

• Credit and debit cards: Accept card payments anywhere using Square—online via e-commerce stores, online invoicing, remote payment links and keyed-in payments and in-person using the mobile POS app card reader or in-store POS checkout.
• Mobile wallets payments: Accept Apple Pay, Google Pay and Samsung Pay in person using contactless card readers and online in your Square Online e-commerce store.
• Cash App: Accept Cash App payments via Square POS contactless card readers, remote payments links and the Square Online e-commerce store.
• ACH payments: Offer clients a secure way to pay invoices directly from their bank account with Square’s ACH payments.
• Recurring payments: Set up automated recurring payments for invoices, subscriptions or memberships using credit card or ACH payments.
• Gift cards: Offer customers both e-gift cards and standard gift cards and track gift card sales and balances.
• Buy now, pay later: Let customers finance their purchases using Afterpay through Square. You get paid immediately and your customer can pay over time.
• Cash: Record cash sales in your Square POS app and dashboard.
• Paper checks: Record paper check sales in your Square POS app and dashboard.

Square’s Credit Card Processing Fees

Square has transparent, easy-to-understand payment processing fees based on how the sale is made and the type of payment used.

Going from sign-up to accepting payments takes just minutes with Square. Once you’ve set up a free Square account, you can start processing payments right away using several online and keyed-in payment methods—even before your card reader arrives.

Before You Begin

Square requires the following information to open an account. Having this handy will speed up the process:

• Full legal name: Square requires the account holder’s full legal name, adding a business name is optional.
• Social Security number: Square requires the account holder’s Social Security number; business employee identification numbers (EIN) are optional.
• Bank account: You’ll need a bank account to receive Square payouts. This can be a personal or business account, or you can set up a new Square bank account during registration.
• Date of birth: Due to credit card regulations, Square applicants must be 18 years of age or older.
• Home mailing address: Square requires the account holder’s home mailing address; business addresses are optional.
• Cellphone number and email address: Needed for account and mobile POS app setup; can be your personal or business phone number and email.

Set Up Your Square Account

Square makes sign-up incredibly simple with a step-by-step wizard. In the wizard, you select an individual or business account, enter your address and the last four digits of your Social Security number and choose how you’ll sell and accept payments. You can choose to attach your bank account or open a new Square bank account to receive your payments during setup, too. These preferences can be edited in your Square dashboard Settings tab as needed.

Explore Your Square Dashboard

To start using Square to process credit cards, head to your Square dashboard, shown below. Here, you can start accepting payments right away using three tools in your dashboard—the Virtual Terminal, Invoices and Payment Link.

Within your Square dashboard, you can continue fine-tuning your business information, add customer or product information and start exploring all that Square has to offer.

Download the Square POS App

Next, visit the app store on your phone or tablet and download the Square POS app. After you sign in with your Square account login and password, you’ll have access to Square’s POS sales and credit card processing tools within your mobile device.

Order Your Square Card Reader or Register

To use Square to process credit cards in person, you’ll need a card reader or register. Square provides one free mobile magstripe credit card reader with every account. You can also purchase a contactless card reader or terminal with receipt printer for mobile sales or choose from various register options for a retail store setting.

	Mobile POS Magstripe Card Reader First is free; $10 each for additional reader Works with both iOS and Androids phones and tablets and sends email or text receipts Best for occasional in-person credit card payments, such as mobile service payments and market sellers
	Mobile POS Contactless and Chip Card Reader $49 each, one-time cost Offers added security, enables Apple Pay and Google Pay and sends email or text receipts Best for regular sales needs using in-person credit card payments, such as market sales, service payments and food trucks
	Mobile POS Terminal $299 each, one-time cost Supports swipe, chip and contactless payments with email, text and printed receipts Best for mobile sellers, service payments, pop-up shops, boutiques and eateries that need to print a receipt with a sale
	Retail Square Stand $149 each, one-time cost, which does not include iPad Integrate with your iPad to create a sleek all-in-one checkout register; supports barcode scanners, receipt printers and a cash drawer, purchased separately Best for retail shops, walk-up food counters and pop-up shops needing a register-type setup
	Square Register $799 (or $39 per month for 24 months) Dual-display all-on-one checkout station ideal for retail stores and walk-up foodservice counter sales; supports barcode scanners, receipt printers and a cash drawer, purchased separately Best for retail stores, walk-up food counters, service providers and small businesses wanting an all-in-one checkout station with a customer-facing screen vs. the iPad Stand version.

With your Square account set up, you’re ready to start processing credit cards and other types of payments using the tools in your Square dashboard and POS app.

1. Use Square’s Virtual Terminal To Process Credit Cards

Square’s Virtual Terminal lets you key in credit card information from phone orders or for in-person sales if you don’t have a card reader available. To process a credit card this way, click on Virtual Terminal in your Square dashboard and select Take a Payment to create a new sale.

Complete the appropriate charge amount and payment type fields and click Charge and your payment is complete.

2. Use Square Invoices To Receive Payments Online

With Square Invoices, you can accept both credit cards and ACH payments immediately upon account sign-up. To process payments using invoices, click on Invoices in your Square dashboard, complete the blanks in the invoice fields, select the available payment options for the invoice, enter your client information and email address and click Send.

Your client will receive an emailed invoice with a link to complete the payment online using one of the selected payment methods.

3. Use Square’s Payment Link To Process Credit Cards

Payment Link is another way to use Square to process credit cards. This sends a payment request to a customer via a text link. Payment Link is a payment method in the Virtual Terminal. Instead of keying in a payment directly, select Send Payment Link, enter your client’s cell phone number and click Send Link.

The text link opens the secure Square Online Checkout. There, clients can choose to pay with a credit or debit card or via Google Pay, Apple Pay or the Cash App.

4. Use the Square POS App To Process Credit Cards

Once installed on your mobile device, you can use Square’s POS app to process credit cards by keying the card information directly into the app or using a Square card reader or register to capture card data physically.

Most users pair the POS app with a card reader or use a retail register to accept credit cards physically, as shown below.

However, the versatile POS app also lets you key in card information to process mobile payments when needed, as shown below.

5. Process E-Commerce Payments

Square supports payment processing for all types of e-commerce stores. If you don’t already have an online store, you can launch a free e-commerce website using Square Online. Simply add product information to your Square dashboard, set up your Square Online shop and you’re ready to receive orders and process online payments.

If you already have your own website on WordPress, Wix, BigCommerce, Ecwid or other top ecommerce platforms, you can connect Square’s payment gateway seamlessly to process credit cards for online sales.

Square is a streamlined, fully integrated payment and business management system that provides a ton of value to startups, small businesses and multichannel power sellers alike.

The main benefit of using Square is that everything, from payment processing, multichannel and mobile POS sales to customer marketing, staff management and inventory tracking, all works seamlessly in one system.

Square is also ready to support growth with feature add-ons, such as payroll, advanced retail inventory, email marketing and gift card programs. These come with monthly fees, however when added to the boatload of free perks you get, Square has few rivals. Learn more in our full guide to Square.

Drawbacks to Square

Square does have a few downsides. Payout holds, account freezes and chargeback issues top the list of complaints from Square users. If Square deems your account has too many fraudulent charges or chargebacks, it can withhold payouts or freeze your account. Essentially, this puts your business on hold until the issue is resolved.

Fee flexibility is another complaint among Square users. While Square does offer fee discounts to businesses processing more than $250,000, it still calls the shots on the fees you pay.

Square competitors can provide lower payment processing rates, especially at higher sales volumes. However, few competitors offer an equivalent suite of business management features and sales tools. The cost of piecing together services and software to duplicate Square’s toolset should be included in any price comparison.