When thinking about the choice between a traditional credit card terminal vs. Square most people primarily think of an in-store transaction (traditional) and a mobile transaction (square). Traditional credit card machines usually need to be plugged into an electrical outlet and are more stationary in nature, although mobile point of sale terminals are also available. Square offers extremely flexible mobile payment processing by plugging into a smart device and processing payments off of your existing wireless provider. However, those features are just the tip of the iceberg when it comes to payment processing choices.
The options are extensive, and it is crucial to examine your business from a variety of aspects. More importantly, educate yourself on the products available, before deciding which format meets your organization’s needs.
Is this your first time processing credit card transactions?
Some major players to consider when weighing your options between square or a traditional credit card machine are the application process, cost, contracts, equipment used, customer service, and flexibility.
When looking at Square, there is no application fee, and they have an ‘open door policy’ with individuals looking to open an account. Providing Square with basic information about your business and verifying your identity is the bulk of what it takes to get started, no credit checks involved.
With no contract or hidden fees, initially Square can seem like the more attractive option. Square charges 2.75% per swipe, more for manual or offline transactions. By only paying for the transactions, there is no need to worry about having to pay different rates for different cards.
How does each option process credit cards?
Both the Square card reader and a traditional credit card machine process transactions similarly and meet industry established compliance & security standards. Using a square system allows business owners to process credit cards ‘on the go’ which is a convenient option especially when the unit can plug directly into a smart device. However, convenience isn’t always the smarter choice and often lacks certain safeguards for businesses when it comes to credit card processing, along with higher rates.
All about merchant services contracts
Subscribing to a merchant account service with a terminal will have various pricing structures. The age of your business, type of cards accepted, and the type of industry you are in, will factor into your rates. Depending on your business volume it can be an easy choice to enter into a contract with a traditional merchant account provider and process payments via a traditional credit card machine. Hitting sales of over $10,000 a month makes a credit card terminal the more affordable option because of the competitive rates offered by a merchant processor.
You may have to enter into a contract with a traditional merchant provider, but in recent times even traditional merchant account providers are doing away with long-term contracts and opting for a month-to-month payment structure with their customers.
Pay-as-you-go credit card processing
If looking for a pay-as-you-go processing, Square checks those boxes. With no monthly fee, application or early termination fees, this continues to be one of its biggest draws. You can stop using Square at any time, and start up again later if you need. If you are a business that is processing anything less than $5,000 a month in sales, and Square may be the better payment processing solution.
Software options for payment processing
Are you looking for software options? Square limits you immensely in this category by locking you into using the Square Register app and Square-supported integrations. Merchant account providers give you far more flexibility in what equipment and software you choose. Having a traditional merchant account, you can use any POS, inventory management, booking, or customer management software. This allows for the use of much more advanced software than that of the Square option.
Do you appreciate customer support?
As always when using most technologies or software, you will run into headaches, malfunctions, and the like. Choosing a merchant account provider and using a traditional credit card terminal will provide a built-in customer service program. Imagine having a real person assigned to your account that you can speak with to troubleshoot? With a traditional credit card terminal, you’ll get just that, someone who can make adjustments or any other needs related to your account that you might have. In contrast, Square offers some customer support but really can’t compete with the personalized service you would receive choosing a traditional merchant account provider.
As in any situation, there are pros and cons to using both the Square of a traditional credit card terminal. Research and taking the time to consider the option that’s best for your business model can ease the burden of choosing between the two services.