Pros: FREE TO USE. Competitive processing fees/ lack of contracts
Cons: Customer service phone trees. Transaction holds for the unverified.
You got a small business?
You need a way to accept credit cards but have a shop without phone cables you'd need for a credit card terminal?
Need something safe, reliable and effective to make your customers feel safe during each transaction?
Well - the Square Credit Card Reader might be for you!!!
The Square credit card reader is a simplistic, squared-off credit card reader with a 3.5mm headphone jack – able to interface with Apple’s iPhone, and Android phones such as the Galaxy Note II and Galaxy S III. The jack doesn’t fit flush with any phone – which is actually a good thing considering some phones have deeper recessions for their 3.5mm jacks than others. Just be careful not to bend the unit and you don’t risk damaging your headphone jack. Simply remove the device after each use and put it in your pocket. At first, I was disappointed the reader plugs into the headphone jack instead of the data port, but with Apple’s recent drop of the 30-pin connector and the introduction of 8-pin Lightning it is clear to me that the headphone jack was the better choice. This will work with iPad, iPad mini, just as well as it does on the phone.
You can get started with Square immediately by downloading the FREE app from your App store to your iOS device. The best choice is probably to use the device on your phone since it has a constant data connection. Or – you could do what I suggested and get an iPad Mini 4G/LTE.
Setting up an account with square is as easy as signing up for a new credit card. Square wants to link directly to a bank account. I recommend going to a bank with $0 checking fees and starting a brand new account. Capital One gave me free checking with rewards where I build points towards airfare (I’m planning a getaway to Seychelles in 2014). Square even has their own rewards program where you can cash in points for discounts, gift cards, etc.
The Card reader will accept your typical cards carrying the Visa, Mastercard, American Express and Discover logos – debit cards included. The app is 100% free, but you will be charged about 2.75% per transaction. If the card’s magnetic strip is damaged and you need to type in the info, you’ll be charged significantly more: 3.5% with a 15 cent processing fee.
STEP #1 Type in the amount of the item your customer is paying for.
STEP #2 Type in a short description of the item (for digital receipt purposes) which the customer will get via text message or email.
STEP #3 Have the customer approve the transaction on-screen.
STEP #4 Wait one day for your money to be transferred to your account.
STEP #5 ????
STEP #6 PROFIT!!!
The transaction process is as simple as can be. For the most part, it’s also relatively safe. Your transaction is automatically geotagged, logged, and encrypted. The card reader itself cannot store data so there’s very little chance of an unmodified Square reader causing identity theft. Credit card purchases also have contractual protection to protect against identity theft so as long as you aren’t the one buying items, you are pretty much safe using Square.
Square does place an immediate limit on the amount you can charge within a week as a fraud protection. The limit defaults at $2000 – unless you provide them with documentation to prove your business’ legitimacy early on. Any amount larger than $2000 can be held for a month (longer if there is anything “suspicious” around the transaction). Call up Square looking for the “missing” money and they’ll let you know that they review your account monthly and if your business regularly charges over $2000, they will raise your limitations to match the average amount of your charges. For example, if you sell car parts, used cars, fur coats, etc.
In regards to form factor, the Square reader is cute, functional and fits the Apple design philosophy. However, I personally preferred using the Mophie Marketplace reader due to the fact it physically wrapped around iPhone and had a longer sensor strip. This reader was designed to fit the iPhone 3G – which has completely been obsolete by the iPhone5 and its LTE access. If you don’t yet have an iPhone 5/ are still using an iPhone 3G/ or just want to buy the entire credit card reader and phone on the cheap, I’d recommend you get the Mophie and a used iPhone 3G from ebay. Many of you may have an Android device, but don’t want to use your own phone for credit card swipes which might make you consider buying an independent device for this purpose alone.
When I first started using the device, I made a mistake and it locked my bank account. When you want to “practice” using the device, you are supposed to enter $0.00 as a transaction to avoid incurring fees for swipes. However, you’ll want to go to your bank and ensure the fraud protections on your account understand that you are using a mobile card reader through a smartphone. Some banks policies are to call you for every single “suspicious activity” – while others simply *stop* your account.
At the end of the day, Square is one of those basic internet-style companies that caters to a clientele larger than its own business model can support. They don’t have a massive network of customer service employees like the big banks do. If you call them up, your call is more than likely going through a phone-tree that ends up in a voice mailbox. This is something to consider before choosing a mobile reader over a classic phone-line terminal.
Whether you are selling antique guns at a gun show, antique trains at a train show or working a private massage parlor, the Square reader is simple to use, relatively safe to use and almost “fun” to use. Some small business owners reading this may be disappointed by the fees which are admittedly higher than the qualified rate most standard card readers incur, but when you consider there is no contract or monthly fee (like the Mophie) , you do actually save money in the long run.
Just in time for the holidays, Square has gift cards available inside the app. If you want to send gifts to friends and family and don’t use Paypal, Amazon, etc, you can use your account with Square to send personalized giftcards an even pre-paid coupons/gift cards to brighten up the season.