Understanding Square Payment Processing Fees
Square is a leading payment processor known for its simple pricing and all-in-one POS system. Understanding Square's fee structure helps you choose the right payment method, price products correctly, and maximize your profit margins on every transaction.
Square Fee Structure (2025)
Transaction Types & Fees
In-Person Payments (Card Reader/POS)
2.6% + $0.10 per transaction
Tap, dip, or swipe with Square Reader or Square Terminal
Square Online (Ecommerce)
2.9% + $0.30 per transaction
Online store, website checkout, payment links
Invoices
2.9% + $0.30 per transaction
Email invoices sent from Square Dashboard
Keyed-In Payments (Manual Entry)
3.5% + $0.15 per transaction
Manually typing card numbers - highest fees due to fraud risk
Square vs Stripe vs PayPal Fee Comparison
Fee Comparison on $100 Transaction
Square offers the lowest in-person fees at $2.70 per $100, beating Stripe by $0.05. For online payments, Square and Stripe tie at $3.20, both beating PayPal's $3.48.
When to Choose Square vs Stripe vs PayPal
Choose Square When:
- ✓Retail POS: Best all-in-one hardware + software for in-person sales
- ✓Lowest In-Person Fees: 2.6% + $0.10 beats Stripe's 2.7% + $0.05
- ✓Simple Pricing: No monthly fees, transparent flat rates
- ✓Quick Setup: Accept payments in minutes with no technical skills
Choose Stripe When:
- •Custom Integration: Need full API control and branded checkout
- •Subscription Billing: Superior recurring payment management
- •Global Payments: 135+ currencies with 1% conversion vs 3%+
- •Developer Tools: Best-in-class API documentation and SDKs
Choose PayPal When:
- •Brand Trust: 400M+ users with existing accounts
- •eBay Sales: Standard payment option on marketplace
- •Lowest QR Code Fees: 2.29% + $0.09 for in-person
- •Buyer Protection: Strong dispute resolution favors consumers
Advanced Square Fee Optimization Strategies
Minimize Square Processing Fees
- ✓Use Card Reader for In-Person: 2.6% + $0.10 vs 3.5% + $0.15 keyed-in saves $1.05 per $100
- ✓Avoid Manual Card Entry: Keyed-in fees are 35% higher due to fraud risk - always use card reader
- ✓Square Terminal vs iPad POS: Terminal ($299) has same fees as Reader but better UX
- ✓Batch Invoices for Same Customer: One $500 invoice costs less than five $100 invoices ($14.50 vs $15 total)
- ✓Custom Rates for High Volume: Processing $250K+ annually? Contact Square for negotiated pricing
Fee Comparison: Small vs Large Transactions
Fixed fees impact small transactions more than large ones. Here's the effective rate breakdown:
In-Person (2.6% + $0.10)
- •$10 transaction: $0.36 fee (3.6% effective)
- •$50 transaction: $1.40 fee (2.8% effective)
- •$100 transaction: $2.70 fee (2.7% effective)
- •$1,000 transaction: $26.10 fee (2.61% effective)
Keyed-In (3.5% + $0.15)
- •$10 transaction: $0.50 fee (5.0% effective)
- •$50 transaction: $1.90 fee (3.8% effective)
- •$100 transaction: $3.65 fee (3.65% effective)
- •$1,000 transaction: $35.15 fee (3.52% effective)
On small $10 transactions, keyed-in effective rate is 5% vs 3.6% in-person. Always use a card reader when possible.
Protecting Your Business with Square
- •Build Fees Into Pricing: Use this calculator to determine the amount to charge that covers all Square fees
- •Track Effective Fee Rate: Monitor your actual fee percentage monthly to catch rate changes or errors
- •Next-Day Deposits: Square deposits funds by next business day (free) or instantly for 1.5% fee
- •Chargeback Protection: Square provides free dispute management tools and seller protection for eligible transactions
- •Revenue Recognition: For accounting, log fee expenses separately from gross sales for accurate profit margins
- •Square Capital: Access business loans based on your sales history (fees deducted automatically from future sales)