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!
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.
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 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.
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:
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:
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:
Square also offers various paid-for software upgrades to Square Reader merchants:
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:
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.
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.
Square Reader is compatible with four different Square software platforms. Let's explore each option in more detail:
To contact Square customer support, you have the following options:
Likewise, various online resources are available on Square's website to help you troubleshoot issues with payment hardware or software.
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.
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 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 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.
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.
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!