Why You Need to Read this if You are Using Square POS

Why You Need to Read this if You are Using Square POS

Pros & Cons of Square Point of Sale

As an independent provider of merchant service point of sale, we feel we have a responsibility to provide straight forward information even if it’s about one of our biggest competitors, Square POS.  Square POS is a great tool for small business credit card processing.  However, like any business solution, it’s not the best fit for every situation.  Having knowledge of when to use a product or when not to can make a world of difference in managing your business.

The Pros of Square’s Basic Point of Sale System

The first advantage Square Retail POS has is that it is easy to obtain and it’s easy to use.  You can purchase it online, and you don’t have to deal with the typical merchant service sales person. Square’s Point of Sale done a great job in focusing on credit card processing for small business.  

There are many other competitors in the point of sale space that have similar products. However, the majority of those competitors have incorporated to many features in their small POS system which makes them too complex.  Having extra features that aren’t needed or ever used confuses users making the system seem clunky.  Square POS has also done a great job in keeping a simple pricing model.  

There are only two rates, 2.75% and 3.49% with no monthly fees. It’s simple, straight forward, and business owners know what rate they’re going to be paying for each transaction they process. Keeping things simple and having no monthly fees has driven Square POS to be one of the biggest competitors in the industry in a short amount of time.

The Cons of Square Point of Sale

As with any tool, there are bound to be some downsides.  As stated above, not every tool fits every business.  The first downside to Square POS is that it’s very limited in its functionality.  For businesses that are looking for a seamless flow of data between their POS system and QuickBooks, it just doesn’t exist.  Or for the business that needs reports on their credit card data, then Square is not for you.  When it comes to pricing, Square can become an expensive solution if you process any substantial volume.  Although there are no monthly fees, processing over 10,000 a month consistently makes the 2.75% swiped rate way more expensive.  If you are keying transactions, then the 3.49% keyed rate can cost you even further.  Another big downside to Square is the lack of support.  Things are going to happen in any business, and if the only level of support you have is to send an email and wait for a response, then it could be disastrous.  And when you are talking about your revenue stream you probably don’t want to be sitting around waiting for a response.

There is one very serious downside to Square that most people don’t know or hear.  As part of their agreement, Square has the right to hold funds at any point they determine there might be a risk.  For example, if you typically process $500 transactions and then suddenly you have one for $2,500, you may see a deposit to your account of only $500 or they may hold the entire amount.  Other credit card processors have this same ability to hold funds, but since there is no one to call, no local representative, and no verbiage in their agreement as to when they will release those funds, it could drastically affect your business.

When to use Square Retail Point of Sale System

  • If you’re a small retail shop with less than $10,000 monthly credit card sales
  • If you accept payments out in the field using a mobile device but also process less than $10,000
  • If you only see a credit card a couple of times a month or less

When NOT to use Square Point of Sale

  • If you’re processing $10,000 or more a month in credit cards
  • If you have multiple forums where you accept payments. i.e., website, over the phone, out in field
  • If you do any invoicing or recurring billing
  • If you use QuickBooks and want the data imported automatically
  • If you believe in having a point of contact for questions and support is important

As we always suggest, before purchasing any point of sale system talk to an independent merchant service sales representative. An honest, straight forward representative can save you hours of frustration and headaches and will help you streamline your business.  To learn more about how Digital Financial Group can help you with a point of sale solution, feel free to reach out to us. 

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