Square's credit card processing fees explained

Square charges a flat rate of 2.6% plus 10 cents per transaction when you swipe, insert, or tap a credit card through their reader. This is their standard rate for in-person payments. If a customer enters their card manually (called a "keyed" transaction), Square charges 3.5% plus 15 cents instead — higher because manual entry carries more fraud risk.

Square does not charge monthly fees, setup fees, or fees to read their app. You pay only when money actually moves through their system. The reader hardware itself is free if you're a new user, though Square occasionally charges $29 for replacement readers if yours breaks or gets lost.

Online payments through Square's checkout tool cost 2.9% plus 30 cents per transaction. This is different from their in-person rate because online payments involve different processing rules and higher chargeback risk.

Key Takeaways

  • Square's standard in-person rate is 2.6% plus 10 cents, charged only when a transaction completes.
  • Manually entered cards cost more at 3.5% plus 15 cents because they pose higher fraud risk to Square.
  • Online payments through Square's checkout cost 2.9% plus 30 cents and follow different processing rules than in-person transactions.
  • Square does not charge monthly, setup, or account maintenance fees — you pay per transaction only.
  • The physical reader is free for new accounts, but replacement readers may cost $29 if damaged or lost.

How the per-transaction fee breaks down

When a customer pays $100 with a credit card at your Square reader, you see $97.40 in your account. Square takes $2.60 (the percentage) plus 10 cents (the flat fee). That $2.70 total is deducted before the money reaches you.

The percentage portion scales with the sale amount — a $50 transaction costs you $1.30 in percentage fees, while a $500 transaction costs $13. The 10-cent flat fee stays the same no matter the size. This means small transactions eat up a larger percentage of your profit than large ones.

Square deposits the remaining balance into your bank account. Most accounts receive deposits within one to two business days, though timing depends on your bank and the day of the week you process the payment.

Why keyed transactions cost more

When you manually type a card number into Square instead of letting the customer insert or tap it, Square charges 3.5% plus 15 cents. This higher rate exists because typed-in card data is harder for payment processors to verify and carries more chargeback risk.

A chargeback happens when a customer disputes a charge with their credit card company and the company reverses the payment, pulling the money back from you. Keyed transactions — where the customer is not physically present — are easier to dispute because there is no signature or PIN confirmation. Square prices this risk into the higher fee.

You should use keyed entry only when the customer cannot physically present their card: phone orders, mail orders, or customers who want to pay over the phone. For in-person sales, always ask the customer to insert or tap their card themselves to keep the lower 2.6% rate.

Comparing Square to other payment processors

Square's 2.6% plus 10 cents is competitive with other popular point-of-sale systems. Stripe charges 2.7% plus 5 cents for swiped cards. PayPal Here charges 2.7% plus 5 cents as well. Toast, which targets restaurants, charges 2.59% plus 9 cents. The differences are small — usually a few cents per transaction — but add up over time if you process high volume.

The real difference between processors often comes down to features beyond the base rate. Square includes a free register app and inventory tracking. Stripe is known for strong developer tools if you want to build custom payment flows. PayPal Here integrates tightly with PayPal's other business services. Toast includes kitchen display systems and table management for restaurants. Your choice should depend on which features matter to your business, not just the fee rate.

Some processors offer lower rates if you commit to a contract or process a certain volume per month. Square does not — their rates are the same whether you process $100 or $100,000 per month. This makes Square simpler to budget for, but it also means you do not get a discount for loyalty or scale.

When Square charges you and when they don't

Square charges a fee only when a transaction successfully completes. If a customer's card is declined, you pay nothing. If you process a refund, Square refunds the fee you paid on the original transaction — you do not pay a fee to give money back.

Disputed transactions (chargebacks) work differently. If a customer disputes a charge and wins the chargeback, Square reverses the payment and you lose the money. Square also charges you a $15 chargeback fee on top of losing the sale. This is separate from the processing fee and is Square's way of covering the cost of investigating the dispute.

Recurring payments — subscriptions you set up through Square — are charged at the same 2.6% plus 10 cents rate as one-time in-person transactions. Square does not charge extra for setting up or managing the subscription itself.

Hidden costs and what to watch for

Square's advertised rates are straightforward, but a few situations can cost you extra money. If you use Square's invoicing tool to send a bill to a customer and they pay online, that payment goes through Square's online checkout rate of 2.9% plus 30 cents, not the in-person rate. Make sure you know which rate applies before you send an invoice.

International cards sometimes carry higher fees. Square charges the standard rate for most Visa and Mastercard transactions, but some cards issued outside the United States may be processed as "international" and incur additional fees. Square's website lists which countries and card types trigger these extra charges, but the amounts vary.

ACH transfers (bank-to-bank payments) have their own fee structure separate from credit cards. Square charges 1% plus 30 cents for ACH, with a minimum of $0 and maximum of $5 per transaction. This is lower than credit card processing but slower — ACH typically takes three to five business days.

Frequently Asked Questions

Does Square charge a monthly fee?

No. Square charges only per transaction. There are no monthly, annual, or account maintenance fees. You can use a Square reader indefinitely and pay nothing if you never process a transaction.

What happens if I refund a customer?

Square refunds the processing fee along with the sale amount. If you charged $100 and paid $2.70 in fees, a full refund returns $100 to the customer and credits the $2.70 fee back to you. Partial refunds work the same way — the fee is adjusted proportionally.

Can I negotiate Square's rates?

Square does not negotiate rates based on volume or contract length. Their published rates explore to all merchants. Some third-party resellers claim to offer discounts, but these are typically not legitimate — Square's rates are set by Square alone.

Why does my online invoice charge a different rate than my in-person sales?

Online payments carry more fraud risk because the customer is not physically present and the card is not inserted or tapped. Square prices this risk at 2.9% plus 30 cents instead of 2.6% plus 10 cents. If you want the lower rate, collect payment in person when possible.

What's the difference between a processing fee and a chargeback fee?

A processing fee is what Square takes from every successful transaction — 2.6% plus 10 cents for in-person cards. A chargeback fee is a separate $15 charge that Square adds only if a customer disputes a transaction and wins. You lose the sale amount plus pay the $15 fee.