It’s got all-you-can-eat features and friendly fees, but how does the Square Reader sit with customers?
by Xanthe Gilmore
Updated: Aug 24, 2018 Published: May 24, 2018
Since launching in the UK last year, San Francisco-based Square has quickly become one of the most popular card machines for small businesses here today, giving its top rivals like iZettle, SumUp, WorldPay and PayPal a run for their money.
Best for – Top-notch features
Not for – Traditional ways of taking payments
Who for? – Lower-volume and budget-conscious small businesses
There’s no denying it, the UK is increasingly becoming a cashless society. But with card readers now more affordable and easy-to-use than ever, even start-ups and small businesses can cash in on the value of these handy devices.
The Square Reader is great if you’re after a features-packed card machine at a budget-friendly price. It even has some nice touches you won’t get with the older generation of card readers – perks like mobile payments and digital receipts. But for all its innovative touches, how popular is it with customers?
Here, we take a magnifying glass to this little gadget, and help you decide if it’s the best option for your small business. Plus, you can go on to our quote-finder, pitch your niggling questions straight to the top card machine companies, and get to compare all your options in one go.
But don’t be put off by the size of Square, in terms of features it’s one of the mightiest.
How does Square work?
Square uses Bluetooth to connect your phone or tablet with their card machine
Square works just like most other card machines: it uses Bluetooth to connect your smartphone or tablet with the little square card reader, and the free app processes the payment for you.
But unlike many others, this card reader doesn’t have a PIN pad, so your customers tap their PIN onto your mobile device screen. Or, if it’s a contactless payment, they’ll just hold their credit or debit card up to the Square Reader.
To get started, you’d just need to sign up on their website where it takes around four days to have your bank account verified, then you’ll be able to order your very own Square Reader.
This video shows exactly how Square works:
What is “PIN on glass” and how does it work?
Because the Square Reader doesn’t have a PIN pad, customers will need to enter their PIN “on glass”, i.e. on the screen of the smartphone or tablet you’re using.
“PIN on glass” is quite different from most other card machine providers, and some people worry it’s not a safe way of paying. Yet you and your customers can feel reassured that this mode of paying is fully accepted by the PCI Security Standards.
Square is a PCI-compliant firm, and uses encryption ★★★★★
Pushing the boundaries of tech often comes with its caveats. For Square, this used to mean customers paying via the device were vulnerable to having their credit or debit card details stolen due to a lack of encryption or authentication.
But since 2012, Square has built robust hardware encryption into all of its devices. This means the company meets Level 1 in the PCI PTS (Payment Card Industry PIN Transaction Security) – a gold standard in this field.
Who is eligible to use Square?
Anyone can register for Square
So long as you have a track record of sole trader income, you can even sign up using your personal bank account. You’ll just need an account with a bricks-and-mortar bank (not PayPal), and it must use Great British Pounds (GBP).
Typically, it will take up to four days for your account to be verified, but you can still receive payments during that time if you’d like.
Small businesses that use SumUp
With its affordable card payments, Square can cater for the needs of every business
Thanks to Square’s handy features like tipping, reporting and employee management, Square is especially big in these industries:
Food & drink
The Square features
You may need to brace yourself for these. Square really is the go-to card reader for jammy features – although with the recent launch of virtual payments and digital receipts, rivals like SumUp are catching up.
The key features with the Square Reader are:
With Bluetooth, you can easily hook Square up to compatible printers, cash drawers and barcode scanners.
Square also offers a host of accessories, including their Dock (making your countertop more professional for £19 +VAT) and iPhone case (keeping the reader attached).
Rather than storing all your juicy sales data on local computers, the Square app lets you check how you’re doing whenever and wherever you like. You also have the option of downloading your sales report into an Excel file for end-of-day browsing, if that’s your thing.
Not all small businesses take all payments in person. With Square, you can send invoices for free, and pay a 2.5% transaction fee if your customers or suppliers opt to pay using a credit or debit card. If this sounds like a lot, it’s actually standard and in line with all the other card reader providers we reviewed.
This is how the Square invoicing works:
If your small business is making sales online, you might be surprised to learn that the Square Reader can help here too. We just find the Square charges less competitive for these – at 2.5%, when many competitors let you process UK card payments online at under 1% per transaction.
That’s why we’d recommend Square for face-to-face payments, with the e-commerce option more as a back-up for your customers.
Virtual Terminals means selling by phone or email. Your Square Reader can double as a virtual terminal, again for a 2.5% transaction fee.
You can track how your employees are performing – with Square’s free basic intel, or for just £3 a month per staff member.
We’ll let Square tell you more:
Square fees and charges
Simple, transparent and competitive fees ★★★★★
Whereas some card reader providers (like PayPal) offer some mind-boggling pricing structures, Square has a simple flat fee of 1.75% per chip & PIN or contactless payment, whatever the card brand.
This is one of the most competitive transaction fees on the market today – matching iZettle, and just a smudge over SumUp’s chart-topping 1.69%, making them extra friendly to small businesses.
With Square, it’s easy to get your head around the numbers. It’s just:
FOR CHIP & PIN/ CONTACTLESS TRANSACTIONS
FOR KEYED-IN/ ONLINE/ INVOICE PAYMENTS
What are the strings attached?
Well, we couldn’t find any. We like Square’s commitment-phobe-friendly packages, with no lock-in, no monthly terminal rental costs, and no minimum monthly sales to hit to get their super low rates.
Refunds are free, and you’re protected by a chargeback cover worth £250 each month. You don’t even need a merchant account to get started, unlike with many card reader packages.
How quickly will I receive my funds?
With Square, you can look forward to getting your hands on your hard-earned cash as quickly as the next business day. If this is important to you, Square is a great option.
It’s similar only to PayPal for speed, and faster – if only a tiny bit – than iZettle’s wait time of one to two working days and SumUp’s lazier two to three day lead time.
Plus, since launching Instant Deposits, Square has jumped to our Number One for payment delay times, meaning your cash can land in your account within a super speedy two hours.
Just note that your bank needs to be a Directly Connected Participant of Faster Payments for you to be eligible (you’ll find the full list of banks here), and these will cost an extra 1% (i.e. 2.75% for most transactions).
Most cards accepted
In the UK, you’ll be able to accept card payments from any of these brands:
This includes all the main ones your customers would ever need, but not Discover, JCB or Union Pay (which only iZettle currently offers).
Square’s payment entry methods
The Square Reader accepts all card payment entry methods:
Chip & PIN
Swipe & Sign
Apple Pay & Android Pay
But for the magistripe option, you’ll need to use Square’s audio jack with your phone. This seems simple enough, but if you’re using one of the latest iPhone models you’d need to remember the adaptor, which makes the transaction process a two-handed act.
If that’s a deal-breaker for you, remember the SumUp card machine has a magstripe reader built into the device.
But in general, not many customers in the UK today use magstripe, so unless your small business is serving a flurry of Chip-free cards (usually overseas customers), we think you’ll be fine.
The Square card reader cost
You can often find Square for a jaw-dropping £19 online ★★★★★
The Square Reader costs a one-off price of £39 (excluding VAT), but it’s often available for less online. That’s really all you pay for it – it comes with free shipping and no monthly terminal fees, like you can get with some other providers.
Card-not-present transaction fees
Square and SumUp are the only card reader providers to let you process payments, even without your customer’s card to hand. Square’s fees for this service are 2.5%, which beats SumUp’s (still reasonable) 2.95% plus 25p by a whisker.
All in all: no-nonsense fees
Our verdict: Square offers some of the UK’s most transparent and competitive fees, and start-ups can do without nasty surprises.
Which is the cheapest card reader for my small business?
As a rule of thumb, if your business is bringing in sales of £1,000 a month or less, you’ll be better off with a hassle-free, simple card payment reader like Square.
Yes, Square’s card reader is one of the cheapest ones around, but a much bigger cost for small businesses over the long term are transaction fees. Here too, Square packs a punch at just 1.75% for most transactions. But there are providers offering closer to 0.4% for debit card transactions and under 0.7% for credit cards.
So, does that make Square an expensive option? Not necessarily – that all depends on your sales volumes. With sales of £1,000 a month, your monthly fees are likely to sit around £17.50 a month, or just £210 a year. These charges are pretty hard to beat all-in.
It’s important to note that cheaper transaction fees almost always come with monthly fees and other strings attached that can make these alternatives more expensive overall. At least with Square, you know what you’re paying, so your monthly card processing charges won’t be too much of a surprise.
Once your sales tip well over that £2,000 – £3,000 monthly figure, other options can start to look more attractive. But with the strings-free contracts of providers like Square and iZettle, you can stay flexible, adapting to how quickly your business grows.
The Square Point of Sale app
Not as jazzy as iZettle, but features-rich ★★★★★
Square Point of Sale is Square’s nifty little app for handling card payments. It’s just about the simplest one out there – which we think is a good thing for small business owners who just want to be up and running fast. But it’s not quite as slick as iZettle or PayPal’s.
The app is free, and has everything you need to run and grow your business, like keeping track of your stock in real time, analysing your sales, and even managing your employees. It even has features like discounting that aren’t available on some rivals like SumUp.
And we’re not the only ones it’s impressing. The app has an eye-watering rating of 4.6 on Google Play – that’s one of the highest ones out there (WorldPay has just 3.6). On iTunes it’s on a less impressive 3.6, but we found this is largely due to US customers where the customer service is apparently less reliable.
We like: The toggle function, so you can easily customise your dashboard
Square’s customer support
Plenty of happy customers, but where’s the weekend phone support? ★★★★★
Square’s fan base is fairly vocal online, and it’s hard to read too much moaning about the company. Of course, their email and online support centre is open all hours, but their customer support team is only available over the phone from 9am to 5pm weekdays.
Square also has an active and helpful YouTube page explaining most things you need to know to get cracking – we found this a nice addition to their help-pages and forums.
To compare, SumUp offers Saturday phone support, and with iZettle you can get evening and weekend help, but it costs £29.
Competitor reviews – SumUp vs iZettle, Square, WorldPay and PayPal
SumUp is a great card payment option for small but ambitious businesses ★★★★★
It’s transaction fees are one of the lowest (nearly as low as SumUp’s), and its app is user-friendly (nearly as fancy as iZettle’s), so overall, we think it’s a great all-rounder for small businesses.
This table shows you how Square compares to its top competitors:
£39 (excl. VAT)
Instant deposits (1% fee applies),
bank account times vary
£59 (incl. VAT)
1.75% (flat rate)
2 – 3 business days
£59 (incl. VAT)
Mostly 3 business days
£39.99 (incl. VAT)
2.75% – 1.95%
3 – 4 days
£75 (incl. VAT)
2.75 – 1% (depending on sales)
Instantly to PayPal,
bank account times vary
In a nutshell
With all the features you could dream of for your small business, and one of the friendliest price tags of all mobile card readers, we at Startups are big fans of the Square card reader.
Square may not have been in the UK for as long as SumUp, but this Californian company is wowing millions of customers worldwide with its easy and affordable card processing solution that’s earned it an impressive 4.6 on Google Play.
Plus, we like Square’s transparent fees and easy-to-use app, making it an ideal option for small business owners.
Overall, here’s what you could look forward to with Square:
Transparent, affordable pricing – Easy-to-digest pricing structures protect you from any nasty surprises
A cheap (but high spec) card machine – This one could be yours for just £19, and there are no monthly fees
A top-notch app – Square’s app is hard-to-beat, with a simple layout and all the features you need
So, if you’re raking in monthly card payments of around £1,500 or under, and wanting a device that’s affordable without cutting corners, we think Square could be a great card payment processing option for our readers.
How do I decide?
But if you’re still not quite sure, we at Startups have built a quick quote-finder for you, and it’s helped to save our readers both time and money.
You just plug in a few key details about what you’re looking for, and you’ll be able to talk directly with some of the top suppliers for you. You’ll be able to ask any questions you have, and will get custom-fit quotes, so you can best compare your options.