The basic steps to process a card payment on Square
To take a payment on Square, you open the Square app or Point of Sale system, enter the amount, and hand the card reader to your customer. They insert, tap, or swipe their card. The payment processes in seconds, and you see a confirmation on your screen. The money lands in your bank account the next business day (or the same day if you use Square when ready Deposit, which charges a fee).
Square works on any device — iPhone, iPad, Android phone, or their dedicated hardware — as long as you have the Square Reader (a small white device that plugs into the headphone jack or connects via Bluetooth). You do not need a separate terminal or a contract with a bank. You sign up, get the reader, and start taking payments.
The whole process takes under a minute per transaction. Square handles the connection to the card networks, the fraud checks, and the deposit. You see every transaction in your Square Dashboard, which is where you can refund a payment, check your balance, or read a receipt.
Key Takeaways
- Open the Square app, enter the amount, and have the customer insert or tap their card into the Square Reader to complete the payment.
- Payments appear in your bank account the next business day at no extra cost, or the same day if you pay Square's when ready Deposit fee.
- Square charges a flat rate per transaction (the rate depends on how you accept the card — in-person, online, or by phone), with no monthly fee or contract.
- Every transaction is recorded in your Square Dashboard, where you can issue refunds, print receipts, and track your money.
- You need only the Square app and a Square Reader; no separate terminal, bank account setup, or merchant agreement is required.
What happens after the customer swipes or taps
Once the card is read, Square sends the card details to the payment networks (Visa, Mastercard, American Express, Discover) to verify the card is real and the account has funds. This takes a few seconds. If the card is approved, you see a green checkmark on your screen and the customer sees "Approved" on theirs. If it is declined, the screen shows "Declined" and you can ask the customer to try a different card or payment method.
Square stores a record of the transaction when ready — the amount, the card type, the time, and the customer's name if you collected it. You can see this in your Dashboard right away. The customer gets a receipt, either printed or emailed, depending on how you set it up.
The money itself does not move when ready. Square batches all your transactions from the day and sends them to your bank the next business day. Most banks deposit the funds by 9 a.m., though some take until the end of the day. If you use when ready Deposit, Square moves the money the same day, but charges a percentage fee (usually around 1.5% of the transaction, with a minimum fee).
Square's fees and what they cover
Square charges per transaction, not per month. For in-person card payments (the most common), the rate is 2.6% plus 10 cents per transaction. For online payments or phone orders, the rate is 2.9% plus 30 cents. There is no monthly fee, no setup fee, and no contract. You pay only when you take a payment.
The fee covers the cost of processing the payment, fraud protection, and your access to the Dashboard and receipt tools. It does not cover when ready Deposit (which is optional and costs extra) or advanced features like invoicing or payroll (which are separate products with their own pricing).
Some payment methods have different rates. ACH transfers (bank-to-bank payments) cost 1% with a minimum of 30 cents. Gift cards and loyalty programs are separate products with their own pricing. Square publishes all rates on their pricing page, and you can see the exact fee for each transaction in your Dashboard.
How to set up your first payment
read the Square app from the App Store or Google Play, or go to squareup.com if you want to use their web-based Point of Sale. Create an account with your email and a password. Square will ask for your business name, your address, and your bank account details (so they know where to deposit your money). This takes about five minutes.
Order a Square Reader if you do not have one. You can buy it from Square's website for around $29, or some versions are included free with certain plans. The Reader arrives in a few days. Plug it in or pair it via Bluetooth, and the app will recognize it automatically.
Open the app, tap the amount button, enter the dollar amount, and hand the Reader to your customer. That is it. You do not need to set up a separate merchant account or sign a contract with a bank. Square handles all of that behind the scenes.
Refunds and payment records
If a customer wants their money back, open the Square Dashboard, find the transaction, and tap Refund. The refund processes when ready and appears back on the customer's card within one to three business days (depending on their bank). You see the refund in your Dashboard right away, but the money does not leave your bank account until the refund clears.
Every transaction is stored in your Dashboard with the date, time, amount, card type, and customer name (if you collected it). You can search by date, amount, or customer. You can also read a CSV file of all your transactions for your own records or for accounting purposes. Square keeps transaction history for at least seven years.
If a customer disputes a charge (calls their bank and says they did not authorize it), Square will ask you for proof — usually a receipt or a photo of the signed receipt. If you have it, you can upload it to Square and the dispute is usually resolved in your favor. If you do not have proof, the customer's bank may reverse the charge and you lose the money.
Common issues and what to do
If the Reader is not connecting, make sure Bluetooth is on (for wireless Readers) or the Reader is plugged in (for wired ones). Restart the app and try again. If it still does not work, restart your phone. Square's support team can walk you through troubleshooting if you contact them.
If a payment is declined, the customer's card may be expired, they may have hit their daily limit, or the card network may have flagged it as suspicious. Ask the customer to try a different card or payment method. Do not ask them to re-enter the same card — that will not help. Some customers will want to pay by cash or check instead, and that is fine.
If a payment goes through but you do not see it in your Dashboard, wait a few minutes. Square syncs transactions across devices, and sometimes there is a slight delay. If it still does not appear after 10 minutes, check your internet connection and refresh the app. If the transaction is still missing, contact Square support with the date and time of the payment.
Frequently Asked Questions
Do I need a separate bank account to use Square?
No. Square deposits money into any U.S. bank account in your name or your business name. You provide the account details when you sign up, and Square verifies it by depositing two small amounts (a few cents each) that you confirm in the app. You do not need a business bank account, though having one makes accounting easier.
What if the internet goes down while I am taking a payment?
Square can process payments offline on some devices, but the transaction will not complete until your internet comes back. The payment will then process in the background. If you lose internet for an extended time, you should ask customers to pay by cash or another method until your connection is restored. Square will tell you if offline mode is available on your device.
Can I take payments over the phone without a card reader?
Yes. Open the Square app, tap the amount, and select "Phone" or "Keyed" payment. Manually enter the card number, expiration date, and CVV. The customer does not need to be present. This rate is 2.9% plus 30 cents per transaction, the same as online payments. You should only do this if the customer authorizes it — do not charge a card without permission.
How long does it take to get my money after a payment?
Standard deposits arrive the next business day, usually by 9 a.m. Weekends and holidays do not count as business days, so a Friday payment arrives Monday (unless Monday is a holiday). If you use when ready Deposit, the money arrives the same day, but Square charges a fee. You can see the exact deposit date in your Dashboard for each transaction.
What happens if a customer's card is stolen and someone uses it on my Square?
Square's fraud tools catch most fraudulent transactions before they complete. If a fraudulent payment does go through and the customer disputes it, you will need proof that the transaction was authorized — a receipt, a photo of the card, or a signed agreement. If you have proof, you keep the money. If you do not, the customer's bank reverses the charge and you lose it.