So, you own a small business and you are looking to purchase a credit and debit card reader. You want it to be simple and easy to use. You are looking for convenience for both you and your customers. And you do not want to front the cost of a big retail POS system.
Well, luckily for you, the Average Cash Team has done the work for you. Let me tell you about the Square Credit Card reader, an innovative and compact POS system that connects directly to your tablet or smartphone.
It checks all your boxes and is much easier to begin using than the complex hardware and software required of larger POS systems.
In this article, I am going to review the Square Reader to give you all the information you need to decide if this is the credit card reader that will most benefit the growth of your business.
What is the Square Reader?
The Square Reader appears to be simply that: a square, and a tiny one at that. This POS system is intelligently packed into a 1.76 inch by 1.06 inch square that uses a headphone jack to plug into your tablet or smartphone.
Sign up for the Square Reader that connects to your device via lightning connector (iPhone and iPad only) and the product is even smaller. The product also weighs a measly 7 grams which makes this POS system ultra portable in comparison to regular retail POS systems.
The Square Reader accepts payments from magnetic stripe cards (debit or credit) and has a free sign up cost. Instead of paying monthly fees or needing to make any annual commitment, you simply pay per transaction at a cost of 2.6% plus 10 cents per swipe.
If your business makes over $250k in annual revenue, you can discuss custom rates with Square.
Another convenient feature of the Square Credit Card Reader is that it requires no charge. However, it does operate using power for your device, so you will likely still be travelling with a charging cord to make sure your tablet or smartphone battery is full.
Finally, the Square Reader can be customized to suit your business needs as it is compatible with third party accessories like iPad stands, printers to print receipts, and Bluetooth barcode scanners. This creates more options for your POS system as your business grows.
How do I use the Square Reader?
It is really easy to get started with the Square Reader. All you need to do if first sign up for the product, and then you will receive it in the mail. There are no upfront fees or long-term contacts to worry about.
Depending on the device you already have, you will pick between the Square Reader with the headphone jack or lightning corrector (make sure you order the correct one).
On the device that you intend to use the Square Reader on, download the Square Point of Sale App and you are ready to operate.
This App can be easily accessed on the App Store or Google Play.
Through the Square Point of Sale App, you or your employees will be able to navigate all the transactions you need to complete, without any extensive additional training (saving time and money for you to continue worry-free operation!). This App allows you to…
- 1Check out customers and prompts the customer to select if they would like to have their receipt emailed, texted, or printed for them
- 2Get quick customer feedback buy a brief question that has customers rate their experience
- 3Prompt customers to leave a tip during their transaction using a user-friendly tool that calculated the tip amount for them, making this an easy decision for purchasers
- 4Generate a customer list to engage people through marketing or loyalty programs
- 5Effortlessly process returns
- 6Automatically update your inventory to know when you need to re-stock
- 7Use the “reports” feature to see how your business is performing daily based on real time sales and inventory analysis reporting done within the App
- 8Set up the App to send your fund directly to your bank account to have quick access to your profits
As you can tell, with the Square Reader you really have the convenience of a basic POS system in the palm of your hand, with added features like real time sales reporting and customer feedback prompts to help you run your business effectively.
As your business expands, you will likely find that you will outgrow the Square Reader and need to upgrade your POS system. Thankfully, Square grows with you, offering a Square for Retail subscription that starts at 60$ a month.
When you upgrade to Square to Retail, you can build an entire POS system and have access to more advanced platforms such as sales reporting tools and features to help you manage inventory.
Pros and Cons
Let me go over different features and scenarios to weigh when you are deciding if this free Square Reader is the best option for your business.
What I think stands out most about the Square Reader is its portability.
Since the Square Reader connects to your handheld device, it is a great choice for vendors who find they take their business to different locations, like markets or event spaces.
Since the Square Reader does not require a charge and can intelligently operate in Offline mode (with no additional fee to you), the Square Reader is a great choice for vendors who take their business on the road, and do not want to be burdened by a POS system that takes time or additional resources to set up. I should mention here that it is available to Canadian merchants as well!
Square Reader can also be trusted for its security. When you use the Square to swipe a credit card or debit card, the information is immediately encrypted. Your customers will take comfort in the fact that Square does not store their payment data on your device.
Square follows Payment Card Industry (PCI) compliance and handles assessments and audits for you to help maintain your business's security and professionalism. They also manufacture their own hardware and value security in their engineering of their products.
To protect your data further, Square performs regular penetration tests and reviews of their coding to anticipate and prevent hacking attempts.
Something else to consider on the topic of security, is that the free Square Reader uses magnetic swiping to take credit and debit payments, rather than chip or contactless tap transactions.
Magstripe transactions do provide you with less protection when it comes to customers using fraudulent credit cards. In this case, you will likely have to shoulder the loss which can be a point of frustration for small business owners.
What is more is that dealing with fraud or payment disputes can be a particular area of concern for vendors who sell more expensive items. So, for this group I would recommend opting for upgraded Square Contactless + Chip Reader for improved protection against potential fraud.
A final note to consider is that because Square is a third party payment processor (different than opening a merchant account with a traditional processor), Square has the ability to terminate your account if Square thinks your business is too much of a risk or a liability for them.
While this is not uncommon when it comes to third party processors, it is definitely something you will need to consider if you think a third party department may deem your business to be high-risk.
So, keep in mind that with any third party processor, you are at a higher possibility of having your account on hold or potentially terminated upon their judgement.
While most people will not encounter this problem, here is where my advice to do your own research on payment processing comes in.
Before getting drawn in to the “free” promise of starting up with a Square Reader, know your business needs and do you research to ensure that Square is the best payment processor for you.
I would recommend the Square Reader for the following groups: smaller vendors who need their POS system to be portable, new small businesses looking to expand their payment processing to allow for debit and credit card payment, lower volume companies, or vendors who sell smaller-ticket items.
Square can also be a great payment processor option for people who do not have the extensive business history or volume to open up accounts with larger retail POS systems.
Of course, successful small businesses do not stay small forever. Therefore, even if you enter the world of payment processing with Square, you can be confident that even when you outgrow the Square Reader, you have options.
Square allows you to easily upgrade your Square Reader to accommodate contactless and chip payments, payment terminals, and registers that come with more intelligent features to support your transactions.
In all, the Square Reader is an excellent choice for businesses looking for a high value, commitment free payment processing option that is transparent and easy to use.