Square looks good, feels good, and helps your business appeal to a younger customer base

10-second breakdown:

Marketing itself as a hip, young alternative to traditional credit card processors, Square has made a name for themselves by being extremely helpful to startups and small businesses. Their services are feature rich and easy to use. Although any sized business can find value in Square, we rank it as the best processor for startups.

The good:

Square has become the master of the bundle. They may have started out simply as a credit card processor, but now they help your business with inventory tracking, POS, online ordering, and even customer feedback. All of these features have to be bundled with their processing, which can same you time and money.

Square not only has a lot of great features, they also offer their customers piece of mind. Square offers users up to $250 in chargeback protection per month. A rarity in this market. They also can help you cashflow with next day business loans.

There are no contracts with Square and therefore no termination fees. Additionally, each add-on service is on a month to month basis. Square does offer a 30 day free trial for each additional service so you can be sure it’s right for your business.

The bad:

Square’s POS system can’t be used independently of their credit card processing. If you stop using them for processing you’ll have to find another POS system as well.

Setting up reoccurring billing can be quite laborious. Technically they don’t support it, which causes you to jump through some hoops.

How it works:

Square started off back in 2009 with a single mission – give you a swipe based mobile/smartphone processing system with no equipment cost and no monthly fee. Back then it sounded more like they were peddling snake oil than offering a legitimate service.

Fast forward to modern day and two things have changed. Quite a few competitors took a page from Square’s playbook and now claim to offer mobile swipe capabilities with little to no fees. Meanwhile Square took it’s early success and rolled out more traditional credit card processing features.

These days Square has branched out from only mobile payments and is now a great option for all types of startups and small businesses from retail to bakeries to food trucks and more. They developed their hardware in-house and now offer their namesake smartphone swiper, a traditional terminal stand and a small contactless & chip card reader.

Keep in mind that the terminal stand still needs an iPad to run, all of their software is app based. On the bright side, you can bring your own to the party if you have one laying around or they’ll be happy to ship you one if you want to pay for a new one.

Similar to a few competitors, Square offers a one to two business guarantee for transactions to deposit into your bank account. They go one step above and beyond though, if you need the money even faster than that they offer ‘instant deposit’ – for 1% of the deposit you can get your money instantly.

Recently, Square has started offering additional features that you won’t see in a lot of the competition. Want to send out invoices? Interested in selling gift cards? No problem, Square can help you out.

Square was born in the smartphone age and it shows. They offer a free app store you can use to download additional programs that integrate with their payment processing. There are quite a few of them so it’s recommended that you give the full list a look on their website, but some of the more popular ones are QuickBooks, Xero, Weebly, WooCommerce and more.

As you would expect from a mobile first company, they make it super easy to set up an online marketplace as well. You can create a free store hosted by Square and they make it pain-free to get started, no coding is required at all. If you’re a startup looking to establish an online presence as well as take credit card payments, Square is definitely worth a second look.

One major downside to note, Square accepts any and all applicants for a new account with no credit check required. This exposes the company to greater risk, which powers a very large risk mitigation department. This means that payments withheld and even account terminations can happen at the drop of a hat if Square thinks you run a mid to high-risk business. It’s a shoot first ask questions later mentality.

If you do decide Square is the payment processor for you, you might want to give them a call or do a little digging first. They occasionally offer a sign-on bonus that gives you no fees on the first $1,000 you charge.

There’s just one pricing plan that Square offers, but there are a few extras you can choose to add-on. There are no monthly fees, all swiped, dipped or tapped credit cards have a 2.75% fee. If you have to key the credit card in it’s 15¢ + 3.5%. This is for every major credit card as well, including American Express and Discover.

The cost is definitely what attracts most businesses to Square. No monthly minimums, no monthly fees, it’s an amazing deal especially for businesses without a track record yet. In addition, all of the extra features they offer are unheard of at this price point. Yes, you’ll find ecommerce stores offered by a few of the competitors, but you’ll be paying a pretty hefty monthly fee for the privilege.

The same goes for all of their hardware, since it was developed in-house Square kept the prices low. Only need to take swiped credit card transactions? No problem, assuming you have an iPad already, the stand only costs $99 outright. No rental fees, it’s yours to keep. Hit the road often? In many cases the mobile card reader is absolutely free, all you need to pay are the transaction fees.

With plenty of small business-focused features like no monthly fee and inexpensive chip card readers, Square is a great choice for startups who may not have the volume of larger companies but still want to provide customers with the convenience of using a credit card.

For complete rankings of all credit card processors, go here.

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