A Complete Guide to Square: Point-of-sale (POS), readers, and more

If you’re a small business owner, you’ve probably heard of Square, the point-of-sale (POS) system which allows companies to sell their products quickly and cheaply in person, over the phone, or online with a Square reader. 

Square payments are a popular way for businesses to make sales and it’s one of the only POS systems to offer a free plan. It caters to a wide range of businesses, from hair salons to online book shops, and it aims to simplify how businesses run, making it easier to process and record transactions. 

However, while it may be a good fit for many businesses, it might not suit all companies. Here we look at exactly how Square payments work including the benefits of using a POS system, what’s included, and the pros and cons of the Square reader to help you decide if it’s right for your business.  

What is Square?

Square is a technology platform which offers business owners a system to take card payments. This can be in person, over the phone, or online with the help of a card reader. 

Square POS has been around for a while and the company, Square Inc, was set up in 2009 by Jack Dorsey, the co-founder and former CEO of Twitter, and Jim McKelvey. 

The original idea for Square was to create a digital platform for businesses so they could start to make cheap credit and debit card payments through a card reader or a mobile phone. At the time, not all businesses could accept card payments and the Square reader was one of the first, allowing companies to sell items with a mobile card reader.

It is now one of the biggest technology platforms around offering a huge range of services to different types of companies. There are more than four million users globally and $4bn in sales are made through Square each year, according to the latest company report.

Along with the Square reader, there are lots of other features they offer such as touch-screen card registers, self-serve kiosks, invoicing systems, gift card systems, the ability to design and run your own loyalty program, and more. 

It also has features which allow companies to track their inventory and streamline their accounting and it allows customers to order items in advance, such as food deliveries, as well as to make appointments.   

Why do businesses need Square?

Square POS makes dealing with the day-to-day administration of running a business easier, and in some cases cheaper. The core benefit of using Square POS (or any other POS system) is that it allows a business to instantly and easily take payments such as credit cards, debit cards, and mobile payments.

In addition to streamlining the process of selling items, depending on what package a business has, it can also perform a range of other tasks such as accounting, creating staff rosters, tracking sales patterns, and recording how much stock is available. 

Using this type of POS technology can also help businesses plan their finances, by instantly being alerted to cash flow issues or a drop in sales or profit, for example. By using a POS system that monitors stock, this can also solve customer service problems such as items being ordered by customers when they aren’t available.

Finally, another great benefit of using a POS system is that it can give businesses real-life insight into their customers and the type of products they are buying. This can help a company to transform – for example, by changing the items it’s selling to better fit customer desires, and quickly and easily making sure they are providing the best service possible for customers. 

What is a point-of-sale (POS) platform?

A point-of-sale platform allows businesses to process payments straight away (i.e. credit cards, debit cards, mobile payments, etc…). When a payment is made, the money will be instantly transferred to the company’s bank account and the sale will be recorded. 

A POS system is a bit like a digital cash register, instantly enabling businesses to make sales whether online, through a mobile device, or in person through a card machine.

A POS system can include various physical or digital products:

• Mobile and tablet apps
• Card readers
• eCommerce checkouts which are used on websites to provide a way for customers to submit and pay for orders
• Touch-screen terminals which lets customers see their itemised basket and pay on their own without needing to hand their card over
• Touch-screen kiosks, which allows for self-service ordering and/or payments

In addition to making sales, POS systems now offer many more capabilities, making life easier for business owners. This includes automatically creating invoices, checking inventory, giving helpful insight into customer and product trends, and more. Businesses can even set up tools to help them create staff rosters and monitor individual employee sales.

What’s included in a point-of-sale platform?

The items and features included in a POS platform will depend on the company and package you choose. Most offer a range of packages, with basic plans offering simple ways for customers to pay via card to premium plans which will include more advanced features. 

There are also plans tailored for specific businesses, such as cafés or restaurants. Here we take a look at some of the features offered by Square, some of which come with an additional cost:

Card reader

The Square Reader is a small, white, wireless device which fits in the palm of your hand, and accepts chip and PIN cards, contactless cards, Apple Pay and Google Pay. They are quick to set up and payments are made straight away and transferred to a company bank account by the next day (or quicker if you pay an additional fee). It can connect to a business owner’s smartphone or tablet, and you can also set up offline payments and sell for up to 24 hours without internet access.  This is a different type of hardware to the terminals which Square also provides, which allow people more control over ordering and buying items.

Terminal

The Square Terminal is a wireless device that lets you manage items, take payments, and print receipts.  It allows customers to pay with chip & pin cards, contactless cards, as well as mobile devices.  It also allows you to take payments offline when there’s no internet access for up to 24 hours.

Register

The Square Register is a fully integrated POS system that comes with two screens that acts as a register for you and a touchscreen display and payment system for your customers.  With the Square Register, you don’t need to supply your own tablet, as it comes with everything you need to serve your customers and let them make payments, along with a range of other features, including ordering services or items. It also lets businesses manage things like click and collect delivery. It comes as a touchscreen till device which can be set up straight away. This usually needs to be plugged into a mains system, turned on, and then you can log into your Square account. 

Self-serve kiosk

If you have a physical branch of your business, such as a café or a shop, using a self-serve kiosk allows customers to order and pay for items without a member of your staff helping them. This can shorten customer waiting times, empower customers to create their own orders, and it can free up your employees to work on other areas of the business.

The Square Kiosk is a frame with built in contactless and chip & pin payment hardware.  It’s designed to fit an iPad into the frame to make an integrated kiosk system that can be mounted on a countertop, to a wall, onto a floorstand, or to any 100 x 100 mm VESA mounting system.

Appointments

With Square Appointments, you can allow customers to make appointments on their own. This could be for any type of business, from a nail salon to a garage. When a customer makes an appointment, it’s possible for an automatic email and SMS reminder to be set up (for the customers as well as the business owner). Recurring appointments can be made, there is a feature for cancellations and no-show fees, and you can set up waitlists if your appointment slots are filled.  

Online ordering and store

If you sell items online through a website, the Square POS system provides an eCommerce solution that allows customers to pay at the checkout. You can also use their website builder and create a professional new website with no coding necessary. Their system also offers integrations with popular social media sites such as Instagram and Facebook.  However you set things up, you only pay when you make a sale if you use the basic free plan.    

Invoices

Using Square can help you keep track of your sales in real time, and also create and send invoices to customers. This could be used, for example, if you own a window cleaning company and when a service has been completed, you want to email your customer an invoice for them to pay you. Square’s Invoice system also allows you to schedule recurring invoices, save and charge cards on file, schedule automatic payment reminders, send digital receipts for payments, and track the status of all your invoices in real time.

Loyalty program

If you sign up to Square Loyalty (which is free for the first 30 days) you can set up customer loyalty programmes. These include things like rewards and discounts for repeat customers and specialised offers based on what someone has bought in the past. You choose how you want to reward customers, such as through points for each visit or the amount they spend, and the POS system will do the rest.  You can also have text messages automatically sent to customers when they earn points or rewards so that your business stays at the top of their mind.

Gift cards

Digital and physical gift cards can be created through Square too, to allow customers to buy vouchers for a future spend. You can customise how these look and work and they can include scannable QR codes and barcodes which are easy to redeem. They can also be kept in a customer’s account to be used at a future date.   

How do Square systems integrate with each other?

What Square products you need, and how they work with each other, will be completely dependent on the type and size of business you run. If you have a very small online shop selling homemade pottery items, for example, the Square Reader may be all you need. On the other hand, a salon might also be interested in the appointment system and loyalty program.

There are also lots of additional third-party apps and tools you can use through Square which can help you when it comes to managing the finance of your business. These include the following (and more):

• WooCommerce
• Wix
• GoDaddy
• Ecwid
• BigCommerce
• CommerceSync
• Zoho Books
• Xero
• QuickBooks
• JotForm
• Cognito Forms
• 123FormBuilder
• Wufoo
• Mailchimp
• Gift Up!
• Staffology Payroll

Square also has partner relationships with many third-party applications to give you extra deals, so to see the current offers and the prices of each, you should check the Square website.  

What are the alternatives to Square?

There are many POS services available for businesses and two of the leading competitors to Square are Paypal Zettle and Clover.

PayPal Zettle:

PayPal Zettle also offers a free basic plan, which would be a good option for any business who hasn’t used a POS service before. It has lots of similar features to Square and has a range of third-party programmes such as those for inventory management and accounting.  

However, Zettle charges higher fees for certain types of transactions, is less flexible, has fewer plan options, does not have many integrations outside of eCommerce add-ons, and often takes longer for payments to reach the owner’s bank account.

Square has many more options and features compared to Zettle.

Clover:

Clover works in a very similar way to Square although it does not offer a free version of its POS system. The physical devices are significantly more expensive than those from Square but it has a similar range of physical products available and a long list of additional third-party services to choose from.  Square still offers more non-physical features such as their online store website builder, appointments system, and loyalty program.

That being said, Clover does not offer anything nearly as streamlined as the Square Reader.  And as mentioned, Clover’s hardware is significantly more expensive.  While Square is very transparent about prices for both fees as well as hardware, the UK Clover site does not list any prices for hardware at all, a practice that we strongly dislike.  However, Clover’s US site does list prices, and here we can get a rough idea of how they compare.

The most portable device Clover makes for the UK is their Flex unit, which is roughly comparable to Square’s Terminal.  However, while the Square Terminal is £149, the Clover Flex is $649.  That is an exhorbitant and vast difference in cost.  As mentioned earlier, Clover does make anything comparable to the Square Reader, which only costs £19, so whether you want the barebones minimum or a more robust system, Square beats Clover hands down on cost.

In addition, with Square, you purchase the hardware from them and then become sub-merchants under Square’s merchant account – this is important to note because this means that you don’t need to apply for your own merchant account, which means no credit check or lengthy application, so the startup time is significantly shorter and the process is significantly easier.

With Clover, you have to apply for your own merchant account, which adds the credit check and lengthy application and makes the process more arduous and time consuming.

The pros and cons of Square

While Square has a lot to offer, there are some negative points to be aware of, as you can see below:

Pros of Square payments:

• Easy and simple system to use
• A free plan available which includes an online store
• Very affordable hardware compared to the competition
• No long term contracts or termination fees
• Features including website software and accounting tools are included
• Many features and options which are useful to a wide range of businesses

Cons of Square payments:

• Square doesn’t run on Windows devices (only iOS and Android)
• For companies making more than £250,000 in transactions per year, they will need to sign up to a custom programme. This is prepared and charged on a case-by-case basis so may involve more admin and more time to set up.
• It may not be suitable for very complex businesses which have lots of unique features not addressed by the Square platform

How to compare POS providers?

It can be overwhelming when you’re first trying to decide which POS service to use, and what features will be helpful for your business. We recommend that you first look at a couple of POS services in order to get an idea of what they are able to do for you.  Then think about what devices or services could make your business management easier. 

Once you have this list and you have a budget for how much you would like to spend, you can then start looking at providers. Keep in mind the following when comparing services:

• What software and hardware is included
• Can you leverage hardware you already own (such as iOS or Android tablets)
• The third-party apps you will be able to use (and if there are any fees for these)
• If there is a contract you are required to sign up to, and how long this will last
• The caps on overall transactions per year
• The fees charged for using the service, from monthly amounts to charges per sale
• Hardware costs
• What customer support features are available (including when support is available)
• Security services for fraud prevention

Is Square worth it?

The Square POS system has revolutionised the way businesses operate, changing the way they can handle payments and ultimately making managing a business much easier than if you had to separately address various needs.

By having a Square reader or any of the other devices included, a business can easily set up a way for customers to instantly pay for items through a huge variety of methods. It could be someone paying through a Square reader with Apple Pay for a coffee in a local cafe, for example, or another customer pre-ordering a meal to pick up later. 

One of the major benefits of using Square is that there is a free plan, so there’s little risk for a business financially to set up an account and trial it out. This is especially useful for small businesses who may not have much spare capital to payout on POS systems.

The third-party apps and devices can also take a business to the next level, quickly and simply setting up things like the accounting for the company or the creation of a website.

However, it’s worth remembering that Square doesn’t work on Windows devices, so if your business is strongly set up for that platform to the exclusion of Android and iOS, then it may not be the best option. It’s also not always advised for companies with large volumes of sales, so if this is you, it’s worth comparing other POS systems before you sign up.