Last updated: 09/09/18
Square is a California-based mobile card reader provider that launched in the US back in 2010. Despite stellar success in the States, it took another seven years until it launched in the UK.
By that time, the mPOS market was packed with great devices like iZettle and SumUp. Payment service giant Worldpay did have a presence in the market but pulled out after a less-than-stellar performance from Worldpay Zinc.
So, in a super competitive niche, can Square do enough to win over merchants? Let’s find out!
(And if you’re tight on time, here’s a super quick overview of the advantages and disadvantages.)
- Low transaction fees
- No monthly rental fee
- Good for low-volume merchants
- Affordable mPOS reader
- Outstanding mobile app
- More expensive than traditional merchant services
- No integrated keypad
- High-risk merchants may struggle to qualify
- Relies on mobile connectivity or WiFi
- Substantially more expensive than traditional terminals
How good is Square?
Square’s biggest selling point is the app, which is, in a word, fantastic. Out of the three big names in the card reader market — iZettle, SumUp and Square — I’d say Square’s app is the most powerful and intuitive to use.
The great thing about it is you can set it up to operate in any number of different business environments. Say you’re running a food business, you can set it up to print kitchen receipts, include tipping options and manage reservations. There are few free options that give you that level of service!
Behind all the smart business-specific stuff there are some outstanding core features like customisable receipts, SMS receipts, split tender transactions and so on.
The card reader itself is also nice if a little basic. The biggest difference between Square and its competitors is the PIN entry method. With iZettle and SumUp, the keypad is built into the card reader so it looks and acts like a traditional terminal. With Square, however, all the reader does it read the card information and customers then have to type their PINs into the app.
How much does Square cost?
One of the great things about Square is its transparency surrounding pricing. Jump onto Square’s website and you can instantly find details on card reader costs and processing fees.
Like most card readers, you’ve got two main costs to think about: buying the card reader and the ongoing processing fees. Here’s what you’re looking at with Square.
|Card Reader Cost||£39|
|Transaction Fee (Credit Cards)||1.75%|
|Transaction Fee (CNP)||2.50%|
Coming in at £39, the Square reader is fairly middle-of-the-road. It’s cheaper than the iZettle (£59) but dearer than the SumUp (£29).
Once you’ve purchased the card reader, you’ve also got to pay a transaction fee on every payment you accept.
Square is reasonably competitive, charging 1.75% to process all major cards via chip and PIN or contactless. Typed in payments (virtual terminal, invoicing, etc.) are charged at a slightly higher rate of 2.5%.
Square vs iZettle vs SumUp
As I mentioned earlier, the mobile POS market is incredibly competitive in the UK and Square was relatively late to the party. By the time Square launched, iZettle and SumUp had both been going for five years.
After giving up so much ground, Square was always going to struggle to find customers in the UK but that doesn’t mean its service is any worse than its more established competitors.
In the table below, I’ve compared Square, iZettle and SumUp across several key areas.
|Card Reader Cost||£39||£59||£29|
|Transaction Fee (Credit Cards)||1.75%||1.75%||1.69%|
|Transaction Fee (CNP)||2.50%||2.50%||2.95%|
|PIN Entry Method||App||Reader||Reader|
As you can see, there isn’t a whole lot between the card readers. Yes, SumUp charges less than Square for standard card transactions but it makes the difference back on CNP transactions. And yes, the iZettle device costs a little bit more than the Square device but it does support PIN entry on the device.
Should I use Square for my business?
I’ve said this before but Square’s long-term battle isn’t against other card readers, it’s against the established terminal rental model.
As you can see above, the leading card readers are fairly similar in terms of capital costs, running costs and functionality.
When comparing card readers with terminals, however, the differences are much clearer. Traditional terminals have relatively large fees and minimum monthly fees. That makes them unattractive for low volume and irregular merchants. However, traditional terminals come with significantly lower payment processing fees.
Once your turnover hits approximately £2,000 per month, it’s almost always cheaper to ditch the card reader and invest in a traditional card terminal.
So, whether Square is right for your business is really a question of turnover. If you’re under the £2,000 threshold, Square will provide an excellent, flexible and affordable means of processing payments. Over the £2,000 threshold and you’re probably better investing in a more traditional set-up.
Compare Card Processing Services
While card readers are great for small or mobile merchants, they are almost always more expensive than a traditional card terminal.
To see what payment options are available to you, click here to go to our comparison engine. (It only takes 2 minutes and could save you up to 40% on your card processing fees!)