Accepting credit card payments in your small business can be a huge hassle. However, with the average customer becoming less and less likely to have enough cash or a check handy, it is a necessary addition to any business. Square makes it easy, by allowing you to take credit card payments directly through your phone. And want to know the best part? The card reader and the app are both free!
Learn how Square will help expand your business, and allow you to reach a wider spectrum of customers, either in your store or on the go.
A Quick History
The founder and CEO of Square is Jack Dorsey – as in, founder of social-networking giant Twitter. Dorsey left Twitter and founded Square with Jim McKelvey in early 2010, and the company has been gaining ground ever since. In May of 2011, Square announced that they were expanding to two new services: Card Case and Register. Card Case gives customers the option of making mobile payments with their own phone by putting their purchase on a “tab”. Register is a new point-of-sale software that Square is hoping will replace traditional point-of-sale credit card terminals. However, in this article we will be focusing on Square’s original product: their Credit Card Reader and Android app.
Creating an Account
To get started with Square, you will need:
An Android smartphone with a 3.5mm headphone jack running at least version 2.1
The last four digits of your social security number
The routing number and account number for your bank account
Your Tax ID Number for your business (if applicable)
To be in the United States and using United States issued credit cards
The first step is to create a free account. Make sure you have your bank account information ready – the routing number and account number – and also your business’s Tax ID Number if you have one. Go to Square’s website; it’s very easy to navigate, and you’ll see the form on the home screen to sign up for a new account. Fill out the email address you’ll be using with the account – most likely your business account – and decide on a password. Keep in mind that this password will be securing your money, so be sure to pick a smart password.
Sign up for a free account
On the next page, you’ll be asked where you’d like your free Square Card Reader to be shipped to. It’s amazing that they are still offering free readers. When I first got mine, I figured the free card reader was just a promotion since they were a new company. However, the company has stayed true to its roots and is still sending out free Card Readers to all new users.
Choose where Square should send your free card reader
After you put in your shipping information, you will see the main user dashboard for the online site. This is where you can view your recent payments, set account settings, etc. However, the extremely important part of signing up with Square is activating card processing, which you should see at the top of the screen. Click on activate card processing and you will be taken to a new screen that asks how you will be using Square.
By federal law, Square must compile some information from its users, including the last four digits of your social security number, Tax ID Number of your business, and so on, to make sure that you are who you say you are. Don’t worry if you aren’t using Square with a registered business and don’t have a Tax ID Number.
Finally, Square will ask you a few clarifying questions – which are really straightforward if you are who you say you are – and then you will be activated and ready to go! You can then set up the bank account that you want Square to deposit the money into. You’ll receive an email confirmation when the process has been completed. Now let’s download the Square app and test the app!
Once you’ve logged in, you’ll see the above screen. Before making your first payment, make sure your settings are how you’d like. At the top-left of the screen, you’ll see a little icon of a person; click that and you’ll be directed to the settings page. Here, you can take a look at the three main settings that you can change:
Tax: if you normally add tax to customers’ purchases, make sure to add in the correct percentage here and Square will add it automatically
Do you sometimes collect tips from your customers? If so, turn tipping on to allow the customer to define how much they are going to tip you at the time of purchase.
Square – like many other forms of point-of-sale – doesn’t require signatures for purchases under $25. You can choose this option also, if you’d like. Also, you can set up your phone to clear the signature when you shake it, in case a customer makes a mistake on their signature.
After you have completed this step, you are ready to take your first payment!
Taking Your First Payment
From the Settings screen, hit the Back button to navigate back to the payment screen shown above. I am going to go through a payment to show you how it works. If you choose to follow along, make sure not to complete the transaction – otherwise the card you enter will be charged for the “purchase”!
To begin, enter the amount you’ll be charging. I used $3.00. Square takes 2.75% of every purchase, meaning that they would take about 8.25 cents from my purchase. Using easier numbers, they will take $2.75 for every $100 you charge. Feel free to enter a description of the purchase if you’d like – or upload a picture – and then click the little money icon at the top-right of the screen.
Choose the method of payment
You’ll then be taken to the screen above, where you can decide how you are going to charge the customer. You can use cash (which doesn’t seem very useful except for keeping track of transactions), enter in a credit card manually, or simply swipe the card. To swipe the card, first make sure the credit card reader is plugged into your headphone jack. Next, with the magnetic strip facing the thicker part of the reader, swipe the card relatively quickly. The app will say that the card has been read, and then Square will analyze and hopefully accept the card.
Customer signs their signature to make the transaction final
When the card has been accepted, you’ll be taken to the signature page, where the customer can sign their signature. This can be relatively hard to do for customers who haven’t used touchscreens much, so make sure that your customer doesn’t get discouraged.
Make sure not to hit Continue to Receipt unless you are ready to charge the credit card you entered (therefore, don’t go to the receipt if you are using your own credit card as a test!).
After you make it to the receipt page, you have completed the transaction! You will see the funds added to your bank account as soon as Square completes the transaction (which they claim is usually within 12 to 36 hours). You can check the status of the transaction from Square’s website. Note that there is a limit of $1000 per week for manual entry of credit cards (when you enter the credit card information by yourself), so definitely use the reader for most – if not all – of your purchases.
Although not the quickest setup, Square is a major player in the mobile payment market, and is only getting bigger. It is useful to anyone that finds themselves in need of credit card processing, but don’t want to have to go through the process of obtaining a traditional point-of-sale credit card processor. Plus, the Square Card Reader is so small, it will fit in your pocket!
I found that the reader was very reliable for the most part. I never had to swipe a card more than once, and Square definitely never changed any of my orders by accident. I now use Square even for quick transactions, like making it easier when me and my friends go out to dinner. I can pay the full bill on my credit card and then my friends can pay me back with their credit cards.
To conclude, Square is a great addition to any small business, and I look forward to seeing how Square will be expanding through their new products in the future. I give it a 9/10.