The hit song from the 80’s is making a comeback.
The past few years have shown that square can indeed be hip once again.
Any small business that deals in direct transactions knows what a costly mess a POS (point of sale) system is. A traditional POS system usually consists of a clunky and expensive cash register, equally pricey software to handle the numbers, and the kicker – customer service fees.
If you’ve visited a Starbucks or Apple Store in the last couple years, you’ve already been witness to the decline of those heavy, ugly cash registers. With today’s technology, most mobile devices (iPads, Smartphones etc.) equipped with a Square card reader can open up a whole lot of space on the counter by eliminating the need for the behemoth POS systems that many of us are used to using (or are currently using).
Square Card Reader Fees
Square card readers easily attach to the headphone jack of a mobile device. The initial reader is free (additional readers are $10). There is no setup cost for creating an account with Square. The setup process is a breeze —provide Square with some basic information, download their free app and connect your bank account. As soon as your card reader arrives and your account is verified, you are ready to begin swiping purchases.
The Square app (named Square Register POS on the app store) has an easy-to-use interface that is simple to understand.
By now you’ve had that nagging thought – where’s the catch? In theory, Square is free. There are no fees for activation, early termination, refunds, inactivity, cash payments or monthly statements. However, Square makes their profit through their card processing fees. They put a non-negotiable 2.75% fee on all card swipes. Despite this fee, it is a very appealing option for small businesses who can’t stomach the thousands of dollars a traditional POS system can cost at start-up.
Square does offer bundles that come with a price tag. The “Paperless” bundle includes square card readers, an iPad stand and APG Vasario 1616 cash drawer. The paperless bundle makes the assumption that you’ll be sending customers a digital receipt via e-mail. It costs $249. Their other bundle is geared towards businesses who want to print receipts, sales reports or even kitchen orders directly from an iPad. It includes everything the Paperless bundle has, but also comes with a Star Micronics TSP143L Receipt Printer. This bundle costs $499.
Square Card Reader Review
Square has a pretty clean record. They are up forward with their processing fees even in their advertising. There really aren’t any hidden gimmicks with their service. Where Square lacks transparency is in their absence of information about account holds. Square’s main problem is that they take a lot of risk by not having the necessary resources to perform credit checks and they have limited merchant underwriting.
To negate the risk they are taking, they pass a lot of stress onto merchants by occasionally placing holds on funds. They will place a hold on any account they find “suspicious.” Their definition of suspicious extends from lots of fraudulent customer charge-backs to a high monthly average or single sale. As a merchant, this can be devastating. Have a customer make a large purchase? Square may decide that this is suspicious and put a hold on the funds.
Several merchants have complained about these inconvenient holds and how irritating it can be trying to get the funds released. The good news is that this is a known issues and Square is undoubtedly working to remedy it. Recently they lifted their cap on keyed-in payments. They used to put a 30-day hold on any purchase over $2002. That is no longer the case.
Square holds a lot of advantages for small businesses. Aside from the cheap start-up costs, Square card readers are an ideal way to receive payment for businesses that service clients on the go. However, their POS software and payment processing fees might not be best suited for every small business.
Square is certainly the front-runner in this technology, but there are other options that are up and coming. One exciting option to look forward to is Flint, which uses a camera to scan card numbers instead of a swipe-reader.