square charge per transaction

How Much Does Square Charge per Transaction

April 9, 2022

Square is a payments service that allows small and medium businesses to accept credit card payments using tablet computers as payment registers for POS (point-of-sale systems). The company owns Cash App, a mobile money app that allows money transfers among users. Cash App also allows businesses to receive payments via the $Cashtag usernames, email addresses, or phone numbers. Back to Square; how much does square charge per transaction?

This composure seeks to disclose the number of fees Square charges per transaction. Since the service is a business seeking to make many out of its facilitated transactions, they must earn something to keep going. There are also other solutions that the company provides to businesses to improve their performance. Various tools keep customers returning to your business, such as customer directory, loyalty programs, and messages.

Square is trusted by thousands of businesses in the United States as it has been in business for a long. Since its foundation in 2009 by Jack Dorsey and Jim McKelvey, the company has been sailing to greater heights with wowing clients every year. Apart from being headquartered and serving USA businesses, the company also operates in

Canada, United Kingdom, Ireland, Australia, and Japan. It is thus an international company. Its main products include Point of sale terminals, auxiliary equipment, and debit cards.

How to get started with Square?

To start using the Square payment solutions, you must create an account online. There are no credit checks, as all you need to provide is the last four digits of your SSN to verify your identity. You also need to explain your business to Square to understand your business better. After your account is all set, you will get a free magstripe reader in your mail.

To get started with your account, you need to visit the signup page and enter the following details.

  • Enter and confirm your email address.
  • Create a strong password.
  • Select your country.
  • Tick the box below to agree to Square’s Privacy Policy, Terms, and E-Sign Consent.
  • Tap Continue and follow the steps that follow.

After your account is ready, you will receive payments and even transfer money from Square to a bank account. We shall see how you can transfer your funds from the platform to a bank account.

How does Square work?

square charge per transaction

I am sure you are interested in understanding how the service works before using it. The platform’s operation is not that difficult as only four significant steps are involved. They include the following.

  • The buyer gets ready to purchase; then, the seller inputs the transaction details into the Square point-of-sale (POS). They then present the buyer with the amount of money to pay. 
  • The buyer then pays for the goods or services by swiping their payment card. You can even dip or tap their NFC-enabled device on the Square Reader or Square Stand to have your Square account information captured.
  • Next, the Square POS sends the payment transaction details to Square, the Payment Service Provider (PSP).
  • After that, Square passes the payment transaction details to the Acquiring Processor through an internet connection, whereby Square pays a small fixed fee for every transaction to the Acquiring Process.
  • After the process is complete, the amount you have spent is deducted from your account.

How much does Square charge per transaction?

Knowing how the platform charges transactions is essential to determine how much you need to spend per given purchase. Well, a square charge per transaction fee of 2.6% + 10¢ if you use a contactless payment using either swiped, inserted chip cards or swiped magstripe cards.

Moreover, you have to part with a 3.5% + 15¢ fee on payments processed using a Card on File, manually keyed-in, or manually entered using the Virtual Terminal. Invoices cost you a 2.9% + 30¢ or 3.5% + 15¢ fee if processed using a Card on File.

We also have other fees such as recording cash, check and gift certificate payments. The platform has no monthly or hidden fees for credit card processing as it deducts all fees before transferring funds to your linked bank account.

How do I withdraw money from Square?

You can withdraw funds to your bank account or access it through Square Checking. The checking account gives you instant access to your money, and you can spend it using your Square Debit Card or the routing and checking accounts. Since it is possible to transfer money from one card to another, you can move money from Square Debit Card to another card at your convenience.

If you do not want the funds to stay in the checking account, you can transfer them to your bank account. Square can always transfer the funds to your bank the next business day or transfer them as per your schedule. When you customize the time, you would like the money transferred to your bank account, which is called “Custom Close of Day Time” and makes bookkeeping an easy job for your business.

The most convenient method of moving money to your bank account is the instant transfer, which charges a 1.5% per transfer fee. The method allows you to transfer money 44/7 to your linked bank account using a debit card.

Instant transfers require you to;

  • Link a bank account plus the U.S. issued Visa or MasterCard debit card to your Square account.
  • Ensure you have at least $25, processing fees included, in your Square Balance.

You need to understand that, as a new seller, you get a limit of up to $2,000 per day for instant transfer or one same-day transfer of up to $10,000.

Remember that you can manually withdraw money from your account to a bank account. You can enable the manual transfers in your account settings so that you can decide when to transfer the money. The transfer has no cost, and funds arrive the next business day.

To enable manual transfers, you can follow the procedure below.

  • Move to Settings in your online Square Dashboard. You can also access the settings on the Square Point of Sale app.
  • Hit on Balance.
  • Navigate to Transfer Schedule
  • Select Manual.

Does Square accept Gift cards?

Gift cards are payment cards that are loaded with cash to give someone who, in turn, shops at particular stores. You pay with them just as you can pay with a debit or credit card. The only significant difference between gift cards and debit, credit, or prepaid cards is that you cannot directly transfer money from the cards to a bank account. It is possible to transfer money from a debit card to a bank account online using its routing and account numbers.

Square itself sells gift cards that you can use on their POS to buy goods and services. We have other companies that sell gift cards, such as Visa, Vanilla, and Amazon, among others.

  • Square accepts debit cards, and as a seller, you can accept a gift card payment in the following manner.
  • Navigate to Checkout
  • Add the buyer’s items from your shop or enter a custom amount.
  • Tap Charge
  • Swipe the gift card through your reader or the front of the Square Stand. You can also have a picture of the gift card Q.R. or barcode with your device’s camera, or even scan the gift card barcode with a barcode reader. If the customer has an eGift Card, you only need to tap the Manual Gift Card Entry menu and enter the gift card details.

Sometimes you may not want to use your gift card to purchase goods but to transfer the money in it to a bank account. For example, to transfer Amazon gift card balance to a bank account, you may have to add the card to PayPal, then use PayPal to transfer the card’s balance to a bank account, or sell the card at a Gift Card Exchange kiosk and deposit the funds to a bank account among other options.

Is Square safe to make payments?

Square is one of the safest platforms to make your payments without worries. First of all, the hardware is secure and end-end encrypted to prevent hacking. Square teams constantly monitor your systems to ensure that everything is in order. They can detect suspicious transactions, and the team can reach you immediately if they spot anything unusual. 

Another mechanism that the company has established to prevent fraud is the 2-Step Verification that adds a layer of security to your account. When logging in to your account, you have to receive a code in your phone to enter it in the given space to ascertain that it is really you doing a transaction.

What are the advantages of using Square?

There are various advantages of using Square, which include the following.

  • Elaborate customer service
  • Data encryption
  • No monthly fees.
  • Affordable card readers
  • Free online selling tools
  • All-in-one payment

Bottom line

Square is a payments platform that allows small and medium businesses to accept credit card payments by using tablet computers as payment registers for POS (Point-Of-Sale systems). The service also owns Cash App, a mobile money app that allows you to accept payments. Square also accepts gift cards such as Amazon and Vanilla. Again, it charges fees in its transactions, and it is usually a minimal amount.

Posted by Spencer Tierney
Spencer Tierney is a writer and expert on certificates of deposits at transfermone.com. His work has been featured by USA Today, MSN, SF Gate, the Los Angeles Times, NerdWallet and more. He earned a bachelor’s degree in English at UC Berkeley.