Square charges different fees depending on how you use the card and where you swipe it
Square's credit card program has no annual fee, but you pay per transaction. The main cost is an interchange fee — the percentage Square takes from each purchase. That rate depends on whether you swipe the card in person, key in the number manually, or use it online. Square also charges a flat fee per transaction in some cases, and you may face additional costs if you use Square's point-of-sale system or request features like invoicing.
The fees are lowest for in-person card-present transactions, where Square can verify the card is real. Rates climb when the card is not physically present, because the risk of fraud or chargebacks is higher. Understanding which fee applies to your situation helps you predict what each sale will cost.
Key Takeaways
- Square's standard in-person rate is 2.6% plus 10 cents per transaction, while keyed-in or online payments cost 3.5% plus 15 cents.
- Interchange fees are what Square keeps; they are not passed to the card networks or banks, so you cannot negotiate them down.
- Square's point-of-sale system itself has no monthly fee, but add-ons like invoicing, inventory, or payroll each carry separate monthly charges.
- Refunds and chargebacks do not reverse the transaction fee — you lose that money even if the sale is reversed.
- Square's rates are fixed and do not change based on your sales volume or how long you have been a customer.
In-person card payments: the lowest rate
When a customer hands you their card or taps it on a Square reader, you pay 2.6% of the transaction amount plus 10 cents. This is Square's standard rate for card-present transactions. The 10-cent flat fee applies to every sale, so a $10 purchase costs you 36 cents total (2.6% of $10 plus 10 cents), while a $100 purchase costs $3.70.
This rate applies whether the customer uses a debit card, credit card, or digital wallet like Apple Pay or Google Pay, as long as the payment happens in person. Square considers these lower-risk because the card is verified at the moment of sale and the customer is physically present.
Keyed-in and online payments: higher fees
If you manually enter the card number — because the customer is on the phone, the reader is broken, or they are paying by mail — the rate jumps to 3.5% plus 15 cents. Online payments through Square's payment link or website integration also use this rate. A $10 keyed-in sale costs you 50 cents (3.5% of $10 plus 15 cents), and a $100 sale costs $3.85.
Square charges more for these transactions because it cannot verify the card in real time. The risk of fraud, chargebacks, and disputes is higher when the card is not physically present. This rate applies even if the customer is a repeat buyer or you have their card on file.
Point-of-sale system and add-on costs
Square's basic point-of-sale app has no monthly subscription fee. You only pay the per-transaction rates described above. However, if you add features like invoicing, inventory management, employee payroll, or advanced reporting, each one carries its own monthly charge. These range from roughly $10 to $300 per month depending on the feature and tier you choose.
Square also offers hardware like card readers, tablets, and receipt printers. Some readers are free or low-cost, while others (like the Square Stand, a full checkout terminal) cost more upfront. You can use Square's payment processing without buying any hardware — the free Square Reader works with most smartphones — but bundled systems may have higher initial costs.
Refunds, chargebacks, and what you cannot recover
When you refund a customer, Square reverses the sale amount but keeps the transaction fee. If you sold something for $100 and refunded it, you get back $100 but lose the $3.70 fee (at the in-person rate). That fee is gone whether the refund was your choice or the customer's.
Chargebacks work the same way. If a customer disputes the charge with their bank and wins, you lose the full sale amount plus the transaction fee. Square also charges a chargeback fee (typically $15) on top of that. This means a $100 chargeback costs you $100 plus $3.70 plus $15 — a total of $118.70 out of pocket.
How Square's fees compare to other processors
Square's 2.6% plus 10 cents for in-person transactions is competitive with other major processors like Stripe and PayPal, which charge similar rates. Some processors offer lower rates if you process high volume or sign a long-term contract, but Square does not negotiate rates based on sales volume or loyalty. What you pay in month one is what you pay in year five.
Specialty processors like Toast (for restaurants) or Clover (owned by Fiserv) may offer different rate structures, sometimes bundling fees into a monthly subscription instead of per-transaction charges. The best choice depends on your business type and expected sales volume. For low-volume sellers or those who want simplicity, Square's fixed rates eliminate surprise bills.
Avoiding hidden costs and unexpected charges
Square's main fees are transparent, but costs can add up if you use features you do not need. Before adding invoicing, payroll, or other tools, check whether you actually use them. A $15 monthly invoicing add-on costs $180 per year, which may not be worth it if you send invoices once a month.
Also watch for international transactions. If a customer's card is issued outside the United States, Square may charge a higher rate or an additional fee. Refunds and chargebacks are the other major cost driver — each one eats into your margin even if the original sale was profitable. Keeping chargeback rates low (typically below 1%) helps you avoid additional penalties from Square.
Frequently Asked Questions
Does Square charge a monthly fee just to have an account?
No. The basic Square account and point-of-sale app are free. You only pay when you process a transaction. Add-on features like invoicing or payroll have separate monthly fees, but the core service has no subscription cost.
Can I negotiate Square's rates if I process a lot of volume?
Square does not negotiate rates based on sales volume. The rates are fixed for all merchants. If you process millions of dollars per month, you may want to compare rates with other processors like Stripe or a traditional merchant services provider, which sometimes offer volume discounts.
What happens to my transaction fee if I refund a customer?
You keep paying the transaction fee even after you refund the sale. If you refunded a $100 in-person sale, you lose the $3.70 fee. Chargebacks cost even more because Square also charges a $15 chargeback fee on top of the original transaction fee.
Are Square's rates the same for debit cards and credit cards?
Yes. Square charges the same rate (2.6% plus 10 cents for in-person) whether the customer uses a debit card, credit card, or digital wallet. The rate does not change based on the card type.
Do I have to use Square's hardware, or can I use a different card reader?
You can use Square's free or low-cost readers, or you can bring your own compatible hardware in some cases. However, you must use Square's payment processing software to get Square's rates. Using a different processor means paying that processor's fees instead.