Square was founded in 2008 with the objective of offering mobile and small merchants the ability to capture credit card purchases using only their mobile phones and a specialized reader. Square was founded in response to a friend of the founder Jack Dorsey complaining he was unable to take a $2,000 payment for custom glass faucets due to a lack of inexpensive and portable credit card reading equipment. While Square has expanded into some traditional retail markets, most notably Starbucks and Whole Foods, its focus continues to be on small vendors. With a low barrier of entry and modest fees, it is the industry leader for small businesses who either don’t process a lot of credit card transactions or need an extremely mobile solution.
It is this low barrier of entry that makes Square the most attractive option for most small businesses and entrepreneurs. The app and basic reader are provided for free, and there are no additional fees beyond the 2.75% per swipe (or the 3.50% plus $0.15 cost per manually-entered transaction). This makes Square very competitive when compared to traditional credit card processors, which will charge for credit card readers, monthly fees, installation, and other costs in addition to the swipe fee. While Square does require an Internet-connected smartphone or tablet to function, the Square app is small, efficient and runs on almost any device. The basic swipe-only reader is free, but a CHIP-enabled reader or stand, which also accepts Apple Pay and Android Pay, can be purchased for as little as $29. These accessories are not necessary, though, and carrying around a reader (or even just the app) along with a cell phone will prove sufficient for highly mobile businesses such as locksmiths, handymen or food trucks.
Square offers basic inventory management system with the app, which is sufficient for keeping tabs in all extant inventory. This also enables vendors to keep track of their incoming cash, as it enables cash transactions, and can even track the cash that should be in the register by the end of the day with the proper accessories. Square can also print receipts with any Bluetooth-enabled receipt printer, although it defaults to free SMS and e-mail receipts. Square will also calculate and collect sales tax automatically based on location, which can be particularly useful for mobile vendors and convention vendors who may be in unfamiliar territory.
Square’s online dashboard offers a number of additional services, including CRM marketing (primarily through e-mail), sales analytics, and Payroll. This is an impressive suite of software for such minimal cost, and explains why Square dominates much of the small business market. Square’s only failings seem to be in the fact that it does not offer the bulk capabilities required for larger businesses. While multiple units can be logged into the same account and process transactions accordingly, the need to purchase multiple tablets for each makes this prohibitive when compared to traditional cash registers – as does Square’s need to be online at all times. Additionally, as the Square app is built primarily for Apple products, Android users may have to wait for certain features. Still, for a small business that only needs a few registers, Square offers a very low cost of entry and very reasonable operating costs, in addition to excellent features.