Square, also known as Block, is one of the world's most recognized fintech companies. Over the past 15 years, Square has made credit card payments more accessible for business owners of all sizes. Its flagship product is the Square Card Reader: a compact, square-shaped card reader that uses audio jacks, Lightning cable ports, or Bluetooth to connect with smartphones and tablets. Since its introduction to the market, it's made accepting credit card payments from anywhere with an internet connection hassle-free. The company's stake in the payment sphere continues to grow — it now has a quarterly Gross Payment Volume (GPV) exceeding $57 billion.
But is the Square Reader still a relevant hardware option for modern businesses accepting in-person payments? This guide explores the Square Reader, its pros, cons, various features, and other related topics. Read ahead to learn more about one of the most successful credit card readers available to small businesses!
What is the Square Reader?
The Square Reader is a compact card reader designed to accept in-person credit card payments. It's become synonymous with the Square brand. While there are many mini card readers now available on the market, the Square Reader was one of the first entrants to the industry, and it remains one of the most popular compact hardware options available to business owners. It's compatible with iOS and Android. For merchants in the United States, there are two types of Square Readers available: Square Reader for magstripe and Square Reader for contactless and chip. The magstripe version only accepts swipe payments, while the contactless and chip version accepts payments from EMV chip cards and contactless payment methods (such as smartphones).
The Square Reader has no screen; it's controlled using a mobile app that merchants can download to a smartphone or tablet. Currently, the hardware is compatible with a range of Square's software products, including Square for Retail, Square for Restaurants, Square Appointments, and Square Point of Sale. Users benefit from software platforms with a range of industry-specific benefits, making it simple for a wide range of businesses to use Square Reader for payments.
Square Reader for contactless and chip
The primary Square Reader offers contactless and chip payment options. To use the contactless Square Reader, customers must have an EMV chip card or a mobile payment device, such as an iPhone. This is the most popular Square Reader, as it offers more security than standard swipe payments.
The Square contactless and chip reader connects to the merchant's mobile device or tablet using Bluetooth and comes with a USB-C cable for charging. The first-generation Square Reader for contactless and chip starts at $39 (it's $49 for the second generation).
Square Reader for magstripe
Square Reader for Magstripe is a card reader for "swipe" payments. While this type of payment was previously commonplace in the United States, the emergence of more secure contactless and chip payments has made it less attractive. As of October 2015, merchants are liable for magnetic stripe card transactions with counterfeited track data, making accepting swipe payments extremely high-risk for business owners.
In 2022, Square stopped selling Square card readers for iPhone and Android with magstripe payment options in Canada. However, it's still available to US-based merchants. Unlike the Square chip reader, the Square Reader for magstripe uses an audio jack or Lightning cable to connect a merchant's mobile device or tablet. US-based businesses can claim a free Square Reader for magstripe on Square's website. For businesses that already have a Square Reader for magstripe, additional readers are $10.
Pros and Cons of the Square Chip Reader
As with any payment hardware, the Square Reader for Android and iPhone has pros and cons. Let's explore the advantages and disadvantages in more detail below:
Square Chip Reader Pros
- Compact Design: The Square Reader's compact design is second to none. It's easy to transport and barely takes up any space in a retail setting, making it one of the most convenient hardware options for accepting payments.
- Easy to Use: The Square Reader and the Square mobile app are very easy to use — you don't need any technical payment experience to get started with this mobile card reader. It's hard to find a more intuitive card reader on the market.
- Understandable Pricing: From hardware costs to payment processing costs, Square simplifies the cost of processing credit card transactions. Square has flat-rate credit card processing fees, making it easy for businesses to understand how much they'll pay every time a customer uses a credit card.
- Can Work Anywhere with Internet Connectivity: Unlike traditional POS machines, which require countertops to function, a Square Reader can accept payments anywhere with Internet connectivity. This is an excellent option for businesses without a fixed location.
Square Chip Reader Cons
- No On-Hardware Screen: Unlike other card readers, which have on-hardware screens to make it easy to view payment totals and other details, the Square Reader does not have any screens. In terms of functionality, this is a very basic hardware product.
- Restricted to Square's Payment Platforms: Merchants using the Square Reader must use Square for payment processing. It's not compatible with third-party payment processors or merchant account providers. This means merchants cannot switch to another provider if they find cheaper pricing elsewhere.
- Potential for Payment Freezes: Square is a payment aggregator, so multiple merchants are aggregated onto the same merchant account. This results in less stable access to payments, as Square reserves the right to freeze your account at any time.
- Requires Mobile Device: The Square Reader cannot function without a mobile device. You must connect your Square Reader to a mobile device or tablet and control it via an app.
- Requires Connectivity: While the Square Reader allows you to accept payments anywhere with an internet connection (including mobile internet, WiFi, etc.), there's no offline payment option. This means if your WiFi goes down or you operate in an area without connectivity, you won't be able to accept payments.
Square Mobile Card Reader: Pricing and Fees
The Square Reader is an affordable hardware option if you're searching for a cheap credit card reader. However, the upfront cost of the hardware is only part of the overall cost of using Square. Once you purchase a Square Reader, you must also use Square to process credit card payments, meaning you are subject to Square's payment processing fees. You cannot pair a Square Reader with a third-party payment provider. Let's explore a full breakdown of the Square Reader for iPhone and Android costs:
Square Reader hardware pricing
- Square Reader for contactless and chip (2nd generation): $59
- Square Reader for contactless and chip (1st generation): $49
- Square Reader for magstripe: Free for first reader ($10 each for additional readers)
- Bosstab Dock for Square Reader: $39
Square Reader payment processor pricing
If your business only requires basic payment features, it can access the Square platform at no monthly cost using the "Free" plan. However, for merchants requiring industry-specific tools, the "Plus" plan has a lot more to offer — it costs $29 per month. There's also a Premium plan available, but the rate varies depending on the merchant's requirements.
In addition to any subscription fees, Square charges the following processing commissions:
- In-person transactions: 2.6% + $0.10 per transaction
- Manually entered transactions: 3.5% + $0.15 per transaction
- Online transactions: 2.9% + $0.30 per transaction
- Invoices: 3.3% + $0.30 per transaction
Square also offers various paid-for software upgrades to Square Reader merchants:
- Payroll: $35 per month + $6 per month per person paid using the platform
- Email marketing: $15 per month
- Text message marketing: $10 per month + rates for messaging
- Loyalty programs: $45 per month
- Advanced Access: $35 per month per location
The Square Credit Card Reader: In-Depth Review
To understand whether the Square Reader is best for your business, exploring its core features and benefits is essential. Below, let's take a deep dive into the details surrounding the Square Reader:
Ease of Use
One of the primary benefits of the Square Reader is its ease of use. Even if you have no previous experience with modern payment technology, after a few simple set-up steps, you'll be ready to accept credit card payments from anywhere with an internet connection.
The mobile app connected to the Square Reader is also very intuitive. Managing products, payments, and other transaction elements is simple. Industry-specific tools, such as Square Retail and Square for Restaurants, make it easy for merchants to access payment features specific to their needs.
Features
- Payment Flexibility: The Square Reader accepts all major credit cards, including Visa, Mastercard, and American Express. Likewise, the primary Square Reader accepts chip and contactless payments, while the magstripe version of the Square Reader accepts swipe payments. Merchants have access to a full suite of payments with the Square Reader.
- Offline Payments: The Square contactless reader allows merchants to accept payments without an internet connection for up to 24 hours. If your business experiences an outage or you need to accept payments in an area with limited connectivity, offline payments are a huge asset.
- Payment Security: Square offers end-to-end encryption, PCI compliance, dispute management services, and a range of other payment protection features. It's a payment provider focused on keeping merchants and cardholders secure.
Hardware
The Square Reader hardware is one of its primary strengths. Its compact, sleek design makes it easy to transport — you can fit this device in a small pocket. Likewise, it has a reputation for durability, which makes it a safe choice for countertop payments. While the hardware is popular because of its small size, you can also purchase a Bosstab Dock, which keeps the Square Reader charged and in a fixed location (this is an add-on popular with businesses requiring countertop payments).
Lastly, in terms of battery size, the Square Reader lasts an entire day with a single charge, so you won't need to worry about running out of battery when you're on the go. Just make sure to charge it overnight.
Software
Square Reader is compatible with four different Square software platforms. Let's explore each option in more detail:
- Square Point of Sale: Square Point of Sale is Square's primary software platform for processing in-person and online payments. It allows merchants to upload custom products, track stock, process omnichannel payments, and more. Its intuitive design makes it accessible to merchants with limited payment experience.
- Square for Restaurants: Square for Restaurants is Square's hospitality platform. It has custom features for restaurants, making it easy to track orders, manage labor, enable takeout orders, set shift schedules, and more. It's a robust solution for restaurants of any size.
- Square for Retail: Square for Retail makes in-store and online retail manageable for merchants. This platform includes industry-specific features for various sectors, including home goods, liquor, clothing, groceries, and more.
- Square Appointments: Square Appointments is a platform designed for businesses with complex scheduling needs. It's perfect for hairdressers, gyms, and various other service industries.
Customer Support
To contact Square customer support, you have the following options:
- Online Chat
- Phone: 855-700-6000 (Monday to Friday: 6 AM to 6 P (PDT))
Likewise, various online resources are available on Square's website to help you troubleshoot issues with payment hardware or software.
User Reviews
User reviews for Square Reader are mixed. While many businesses enjoy the convenience Square offers to merchants, there are many complaints online about unresolved issues, money freezes, and other problems. Square doesn't offer the same stability as a traditional merchant account provider.
Square Alternatives
While Square Reader is one of the most recognizable compact card readers on the market, other options are available for in-person payments. Let's explore three of the top alternatives below:
Zettle by PayPal
Zettle by PayPal is PayPal's in-person payment processing service. The service resulted from PayPal acquiring iZettle in 2018 for $2.2 billion. The company's latest card reader is the Zettle Card Reader 2. The hardware includes a keypad, making it a larger option than the Square Reader. Pricing for your first Zettle Card Reader 2 starts at $29 and increases to $79 for additional units. Payment processing fees begin at 2.29% + $0.09 per transaction.
Stripe
Stripe offers a compact card reader with a similar square shape to the Square Reader. Like the Square Reader, it connects to mobile devices or tablets using Bluetooth and can accept offline payments. It can last up to 28 hours of active use (or longer when the device is on standby). In-person payments start at 2.7% + $0.05 per transaction.
However, while Stripe's card readers for in-person payments provide plenty of functionality for merchants, Stripe is more focused on online payments. If you are a business without an online presence, a payment processor focusing more on card readers and in-person transactions may be more appealing.
Merchant account providers
Lastly, if you don't want to work with a payment aggregator, such as Stripe or PayPal, you may want to consider a merchant account provider. Merchant account providers offer dedicated access to merchant accounts, which improves payment reliability and lowers costs. Many merchant account providers offer hardware with their payment processing services, so you can choose from a range of compact card readers for accepting in-person payments.
Square Mobile Card Reader: The Final Verdict
If your business requires a compact, easy-to-use mobile card reader, it's hard to overlook the benefits of the Square Reader. Its simple and intuitive design makes it an excellent product for merchants with limited payment experience. Likewise, its size and mobile internet connectivity make it a suitable option for businesses without a fixed location.
However, while there are many advantages to using a Square Reader, the device isn't without its drawbacks. The primary issue with Square Reader is that merchants must use Square's payment processing services — you can't connect the hardware to a third-party payment provider. If you want more control over your payment infrastructure, partnering with a merchant account provider is likely the better option!
FAQ About Square Card Readers
