Square Makes Credit Card Transactions Simple and Mobile

Square is a handy mobile app that allows anyone to use their iPhone, Android, or iPod to accept credit cards – either by swiping the card or keying in the data.

2011.4.11 Square

Square Simplifies Credit Card Processing 

What I love most about Square is its sheer simplicity.  This app is much easier and faster to use than any typical merchant account. The merchant account I currently use charges some of the lowest fees, but you pay for that in wasted time messing around with ID numbers, changing and tracking passwords, processing batches, and so much more.

Also, merchant accounts charge monthly fees – Square doesn’t. Square charges you a flat 2.75% for swiped transactions and $3.5% for those you key in.  Even at the higher rate, I would have to charge several thousand dollars in a month to make up the difference with my current processor.

Most months I get paid the old fashioned way – check or cash. Unnecessary fees absolutely drive me crazy. This is part of the business model of traditional financial institutions. Heck, I just discovered that there is travel credit cards that give bonus rewards for traveling.

Shouldn’t the default be the free option – the one that also happens to be green?

There are also no contracts involved with Square. You simply give it permission to connect with your bank account and you are ready to go after they confirm the details of test transactions – crediting and then debiting your account a few pennies.

It honestly took me dozens of phone calls over a week to set up my current merchant account – lots of back and forth and verification. I set up and tested Square in less than 15 minutes. Anyone can do this. In fact, I was not surprised to learn that The Girl Scouts of America are testing Intuit’s GoPayment in specific markets, which is similar to Square but charges slightly higher rates.

Here’s a short (and cute) video showing how quickly and easily it works for these future lady entrepreneurs.

Unlike GoPayment, Square asks for a signature to confirm the transaction. Here’s a screenshot of my signature authorizing my $5.00 test transaction. You simply sign right on the mobile device, which for me is an iPhone.

2011.4.11 Square signature


How To Get Going with Square

Setting up Square is a snap.  Just go to their website and plug in some basic data. They will mail you the little white gadget that allows for swiping cards – for FREE no less. I haven’t tested that device yet but I’m told it works well – and its portable.

After that, all you need to do is download the app to your iPhone or Android and you can accept credit cards.  Yes, it does work with and iPod, but does anyone actually use those anymore? This brings up one of the top requests, which is processing credit cards with Square on an iPad.

I’m sure that one is just around the corner.

Instead of sitting in the dark wondering and waiting for your money to show up in your account, Square keeps you informed. Today I received an email notifying me that the funds of my test transaction will be in my account in a day or so.

There are many other mobile credit card processor besides Square.  However, I’ve read the reviews and Square wins over them because they make everything simple.

Processing fees seem to be the number one reason that small businesses don’t want to accept credit cards.  My response to that is you will process more business by allowing your customers to use a credit card.  If you have to, charge a higher rate to cover the fee.

Many purchases are impulsive. This is why accepting credit cards allows you to take advantage of that buying behavior – making a sale that may not otherwise be possible and so people even like to do these purchase because of the cash back rewards Visa and other benefits.

One of the things I used to do when I had my contracting business was to take the 50% deposit with a credit card – often to allow my customer to get their frequent flyer points on a major transaction, while then requesting the balance be paid by check. Everyone accepted that as a reasonable compromise.

Figure out what works for you.

If you aren’t accepting credit cards now, Square is a great place to start.  There are no financial commitments to do anything. You can set it up to accept just one transaction and then move on.

Wouldn’t you rather lock in a sale than worry about sacrificing a few points and lose the deal?

How simple and easy and profitable is that?

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And please consider subscribing to JeffKorhan.com to learn more ways to profitably grow your small business.

Until tomorrow,  Jeff  

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  1. Diane Czekala says:

    Does this work for smart phones through Straight Talk? They have a new android that works through Verizon. Would that work? Samsung 828C?

  2. Square is a great story and its founder is a great entrepreneur, but merchants need to look beyond the hype and into the numbers. The question you should be asking yourself is “Does it make sense for me to accept credit card with Square?” For some the answer will be “yes” (as for the cupcake baker in our story: http://blog.unibulmerchantservices.com/cupcakes-credit-card-processing-and-square), but for quite a few the answer will be “no.”

    Simply put, Square is a good match for merchants with low monthly processing volumes (because it comes with no monthly or any other fixed fees) and for merchants whose average transaction amount is very low (because Square charges no fixed transaction fee). However, for everyone else its 2.75% per-transaction rate is simply way too high, as the industry average hovers around 1.70% plus $0.20 per transaction.

    • Jeff Korhan says:

      J.G. Your post is very detailed and I recommend others give it a read.

      Here’s an easy way to simplify this. Let’s round off and say there is 1% processing difference between Square and others. AND the fixed costs of the others runs about $300-$400 a year.

      This means you need to be sure you will be processing $30,000 – $40,000 per year to justify the others vs Square.

      Obviously, that’s a lot of girl scout cookies. Even when I operated a multi-million dollar landscape business that amount would not be a sure thing because most clients paid by check.

      I.e. – our preference was not to pay ANY fees. 🙂

      So, it really does depend upon the business. Start-ups can take credit cards with Square at no risk and upgrade to merchant services as their business grows.

  3. I’ve just set myself up with Square, as I fall into that category of small businesses with low volumes and relatively low transaction amounts. It was amazingly easy, and such a relief to get rif of monthly charges. I’m set up on an iPod (yes, there are people still using those!), but since the reader hasn’t accepted any swipes yet, I suspect I have a dud. Easy to request a replacement. However, I haven’t figured out how to accept a signature on my iPod – which of course doesn’t come with a stylus. A fine knitting needle didn’t register anything, although a couple of taps with my finger gave me some random wiggles on the screen. I can’t find any help for this online – any ideas?

    • Jeff Korhan says:

      L.P. – The signature is easy, just use your finger. It may not be legible – but do the best you can. You can see my example above.

      If you are near and Apple store head on in there and they’ll be glad to help. The sell the attachment for $10 but you get a $10 credit from Square.

      Does that help?

      • Thanks Jeff, yes that answered my question – wasn’t expecting such a prompt reply! I don’t live near an Apple store, but will stop in on one when next in the Bay Area.

  4. HI Jeff,

    I’ve been ‘fighting’ with my square app for a little while now, and it keeps telling me that it’s ‘unable to approve’ but i don’t know why…?

    Do you have any suggestions?

    • Jeff Korhan says:

      Jenipher – I vaguely recall going through those steps. The key is making sure it is communicating with your bank.

      You have to make sure all of the banking numbers are correct, and probably give it a day or two to process everything on both ends.

      Then do a test transaction with your own credit card.


    • Jerry Penner says:

      There are 3 gotchas that Square doesn’t make clear:
      1) They want your full legal name on signup. You get one chance to get this right. If you have a middle name, enter your first and middle names in the first name textbox.

      2) Their site doesn’t work properly with IE and the site doesn’t do any browser detection to warn you to switch if you are. Use the latest Firefox or Chrome browser to sign up.

      3) Have all your banking information handy, you have to complete the signup in 10 minutes or your signup attempt will be locked for 3 days. Have a cheque for the account you want to use and know how to read the numbers. Be aware that the account number format they want is 9 digits. If your bank account number is less, precede the number with an appropriate number of zeroes.

      • Jeff Korhan says:

        Thanks for sharing this Jerry – I was not aware of this and assume others may not be as well.

  5. Can I key in a transaction from my phone using the Square if I don’t have the clients credit or debit card

    • Jeff Korhan says:

      Yes – that’s primarily how I use it. You need the card number, expiration date, security code on the back of the card, and the zip code to which it is billed.

      That’s it. 🙂

  6. Does straight talk smart phones work with the square