Square's credit card fees explained
Square charges a flat rate of 2.6% plus 10 cents per transaction when you accept credit cards in person using their card reader. Online payments cost 2.9% plus 30 cents. If a customer pays by keyed-in card (you type the number manually), the rate is 3.5% plus 15 cents. These are the standard rates Square offers to most small businesses; some merchants with high volume or specific industries may negotiate different terms, but you should expect one of these three rates when you sign up.
Square does not charge a monthly fee, annual fee, or setup fee to use their basic payment processing. You pay only when a transaction goes through. The fee comes out of the payment automatically — if a customer hands you $100 in card payment, Square takes its cut and deposits the remainder to your bank account, usually within one to two business days.
Key Takeaways
- Square charges 2.6% plus 10 cents for in-person card payments, 2.9% plus 30 cents for online payments, and 3.5% plus 15 cents for manually keyed cards.
- There is no monthly fee, annual fee, or account setup cost — you pay only when you process a transaction.
- The fee is deducted automatically from each payment before the money reaches your bank account.
- ACH bank transfers and cash payments have no Square fee, though ACH transfers may take longer to settle.
- Square's rates are fixed for most small businesses and do not vary based on card type (Visa, Mastercard, American Express, Discover).
How the fee is calculated on a real transaction
Suppose a customer buys $50 worth of goods and pays with a Visa card using your Square reader. Square calculates the fee as: ($50 × 0.026) + $0.10 = $1.30 + $0.10 = $1.40. You receive $48.60 in your bank account. The $1.40 goes to Square.
If the same customer had paid online instead — through a Square invoice or your website — the fee would be ($50 × 0.029) + $0.30 = $1.45 + $0.30 = $1.75, leaving you $48.25. Online payments cost more because they carry higher fraud risk and require different processing infrastructure.
Keyed-in payments (when you manually type a card number because the customer is not present and you do not have a reader) are the most expensive: ($50 × 0.035) + $0.15 = $1.75 + $0.15 = $1.90, leaving you $48.10. This higher rate reflects the increased chargeback risk when you cannot verify the card in person.
What Square does not charge for
Square does not charge a fee when a customer pays by cash, check, or ACH bank transfer. If you use Square's invoicing tool to send a bill and the customer pays by ACH, there is no processing fee — though the transfer may take three to five business days to settle, compared to one to two days for card payments.
You also do not pay Square for the hardware itself. The basic Square Reader (the small white device that accepts tap, chip, and swipe cards) is free. Square's more advanced hardware, like the Square Terminal or Square Register, may have an upfront cost, but the payment processing rates remain the same.
There is no fee to create a Square account, close an account, or change your settings. Monthly statements and transaction history are free to view in your Square Dashboard.
How Square's rates compare to other processors
Square's in-person rate of 2.6% plus 10 cents is competitive with other flat-rate processors like Stripe (2.7% plus 5 cents in-person) and PayPal (2.59% plus 30 cents). The difference is small enough that your choice should depend on other factors: whether you need invoicing, inventory tracking, payroll, or integration with specific tools you already use.
Traditional merchant services (the kind banks and payment processors offer to larger businesses) often quote rates as a percentage only, without a per-transaction fee. However, those contracts usually require a minimum monthly volume and may include hidden fees for PCI compliance, gateway access, or batch processing. Square's transparency — you see exactly what you pay per transaction — makes it easier to predict costs for a small business.
If you process very high volume (tens of thousands of dollars per month), you might negotiate a lower rate with a dedicated merchant processor. Most small businesses find Square's rates reasonable enough that the simplicity and lack of contracts outweigh the cost of shopping around.
Fees for different card types
Square charges the same rate regardless of whether the customer uses Visa, Mastercard, American Express, or Discover. You do not pay extra for processing an Amex card, even though Amex typically charges higher interchange rates behind the scenes. Square absorbs that difference and passes the same 2.6% plus 10 cents to you for all card brands in-person.
This is different from some other processors, which charge a higher rate for American Express or premium cards. Square's single rate simplifies your accounting and means you do not have to worry about which card a customer pulls out.
Refunds and chargebacks
When you issue a refund, Square refunds the entire transaction amount to the customer's card, including the fee you paid. If you refunded that $50 purchase, the customer gets $50 back and you lose both the $48.60 you received and the $1.40 fee. You do not get the fee back.
If a customer disputes a charge and files a chargeback with their bank, Square charges you a chargeback fee of $15 in addition to reversing the transaction. You lose the sale amount and pay $15 to Square. If you win the dispute and the chargeback is reversed, Square refunds the $15 fee.
International payments and currency conversion
Square's standard rates explore only to payments in US dollars. If you accept payments in other currencies, Square charges an additional 2% currency conversion fee on top of the standard processing rate. This applies to online payments and keyed-in transactions; in-person card payments in foreign currency are not currently supported through Square's standard reader.
For example, if a customer in Canada pays $50 CAD through a Square invoice, you would pay the standard 2.9% plus 30 cents processing fee, plus an additional 2% currency conversion fee. The total cost is higher, so you may want to price your products accordingly if you regularly accept international payments.
Frequently Asked Questions
Does Square charge different rates for debit cards versus credit cards?
No. Square charges 2.6% plus 10 cents for in-person payments regardless of whether the card is a debit or credit card. The rate does not change based on card type or issuer.
What happens if a payment fails or is declined?
Square does not charge you a fee for a declined or failed transaction. You are charged only when the payment goes through successfully. If a customer's card is declined, you can ask them to try a different card or payment method at no cost to you.
Can I negotiate a lower rate with Square?
Square's rates are fixed for most small businesses and are not negotiable through the standard signup process. If you process very high volume, you can contact Square's sales team to discuss your account, but most small merchants pay the published rates.
Do I pay Square's fees if I use their invoicing tool?
Only if the customer pays by card. If they pay by ACH bank transfer or check, there is no Square fee. If they pay by card through an invoice link, you pay 2.9% plus 30 cents.
What is Square's policy on subscription or recurring payments?
Recurring payments (like a monthly subscription) are charged at the same rate as online payments: 2.9% plus 30 cents per transaction. Square does not charge extra for setting up or managing recurring billing.