This morning, I logged into my squareup.com account to find out that my card reader status is now set to “in the mail.” Awesome. What am I talking about? Here’s a quick little explanation… we’ll get into our list after the break.
Square is a portable credit card reader that will work with many mobile devices… most importantly: the iPhone, iPad and even the iPod touch. You can view and download the application by clicking the [iTunes Link]. Basically, it allows the everyday person to accept credit card payments on the go. If you’ve ever used PayPal, imagine the same experience using your credit card: it’s much more secure, right? Yep. Sell that couch securely with a credit card. Offer customer on-the-spot payments for your consulting work. Let your friend pay you back with plastic. It’s 2.75% for a swipe and 3.5% for a card number entered manually. Square also takes a 15 cent cut from each transaction on top of that fee. That’s a pretty good deal for wonderful mobility. The best part is this: it never stores customer information on the device… everyone can feel completely secure during the transaction thanks to the modern technologies of data encryption.
The whole process in itself is not currently rainbows and roses. We’ve done a lot of research. We’ve been reading through and discussing information with people on the forums and have gone over and over the Terms of Service. The ToS is probably the most down-to-earth ToS we’ve ever read… read it for yourself if you’re interested. Click the “Continue Reading” link to see the 10 things you need to know. It’s a list of the top ten questions (and answers) we’ve come across since we fell in love with Square.
Most of the issues we’re running into are largely related to the fact that this is a startup company that just went into mass production a couple of weeks ago. The other issue is the fact that they’re a new financial institute… it will take a while for them to really compete with other per-transaction offerings. Just so you know, Square hasn’t confirmed or offered us any information about any of the theorized statements we’ve written below.
1. iPad versus iPhone users
iPad users were able to sign up for Square accounts nearly a month ago now. Some people expressed frustration with the iPad release instead of the iPhone release. We’d bet that Square released the iPad version first because it would be easier to roll out on a new, semi-unpopulated device than one that has millions of users. From what we’ve heard, they allowed iPad users to sign up for a couple weeks before they even went into mass production. This led customers into thinking they’d be swiping cards sooner rather than later. It’s been over a month since we signed up and our reader status just changed to shipped… but we can see why they did it: they wanted the publicity. It’s the publicity that has them scrambling 24/7 to get the card readers to the right people; without it, they wouldn’t be where they are. For the iPhone and the other devices coming soon, it might be a while before you get your card reader but they’ll catch up eventually. It is our belief that they’re sending out the card readers to people in the order that they signed up. There’s no randomness to it: we bought an iPad so we could sign up for Square (that wasn’t the only reason). In theory, we’ll have our card reader before anyone of the iPhone customers get theirs.
2. The reader wait
Tagging along to the order of distribution: you can’t actually use the app until you have a card reader and activation code. That’s not 100% truthful… you could still use it for cash but who really wants that? Almost all the features that people are wondering about magically appear in the app and on the website once you activate a card reader. Square has never given us — or anyone — a shipping estimate, so it could be quite sometime before the iPhone users get their readers. That frustrated a lot of people. So what? You’re getting a free card reader and a free iPhone app to have a better-than-PayPal mobile credit card processor… be patient.
3. Sign up questions
It’s been a while since we actually signed up so we don’t know what changed here exactly… but the company does require your social security number for verification purposes. It does not appear that Square actually does a credit check at the get go, but reading through their Terms of Service, it looks like you may need to undergo a credit check (soft pull for those of you who are wondering) to increase account limits. This leads us to believe that Square actually stores your SSN on file and would be able to reference it when necessary. Many people have expressed concern with that, but the company is so overwhelmed by the spotlight that we doubt you’ll have any issues. If we dive a little deeper, Square blatantly says that they access our account data anonymously so they can provide us with better service: just like every other company. Some people are a little too protective of their information. Some aren’t protective enough. Either way, I don’t think that Square is something we really need to worry about.
4. Transaction Limits and Account Reservations
There are no transaction minimums, but we’ve read a lot information that points to a maximum limit to the transactions. Some people are sitting at $200 maximum transaction amount and others have had Square increase the amount for them. It appears — at least during the Beta period — they were increasing the amount on a case-by-case basis. The latest information we’ve read expresses a $100 limit per transaction and a limit of 7 transactions per week. We can’t find a specific “this is the amount you’re limited to at the start of your Square account.” Several customers have contacted support to try to increase the limits on their account: they received a canned response (most likely due the influx of support requests in the last few days). We expect that once things are operating smoothly, we’ll see transactions limits increased service-wide and a streamlined way to ask for further increases on an account. We also want to mention the possibility of Account Reservations. If Square determines that you’re refunding an exorbitant amount of money, they may force your account into a 14 day reservation. That means that you could potentially have to wait 14 days instead of the standard daily transfer for your money. We’re guessing that this is in extreme cases… who wants to refund a lot of money anyways?
5. Multiple Accounts and Card Readers
Everything we’ve read so far says that the card reader process is completely automated: every time you install Square on a new device and sign into your account, they’ll send you another card reader for that device. We expect that you’ll be able to request additional card readers via their support at some point in the future, but we couldn’t say that for sure. We also know that you can set up multiple accounts for a single device… we’re just unsure of the detailed process. Some users have reported that you can just sign in and out of accounts on the app: that’s not an elegant solution but it would definitely be the most secure option. If you’d like multiple accounts you can always contact support and request another account activation code. Use one account for your personal finances and another account for your business transactions: pretty simple. As we have mentioned before, the support team is definitely overwhelmed but will get to each inquiry in due time.
6. APIs are coming
Even though the current Terms of Service prevents anyone from using unauthorized software or hacks with the current version of Square, we’ve been hearing that they will eventually release an API for other developers to do more with the service. I honestly think that means that they’re going to stick with the face-to-face transaction concept that many people have questioned. A lot of the feedback has been feature enhancement like a full-fledged POS, online processing and inventory management… but that’s not Square. It’s not exactly meant for businesses even though you could use it that way. It’s meant for the average joe who wants a great way to process credit cards. If a developer wanted to step up and use the not-yet-developed APIs to create a full-fledged POS, more power to them, but that’s not something we should be expecting from Square any time soon.
7. You are your business
If you decide to open an account with Square for a business, the person who does that must actually be able to legally act for that company. We haven’t seen specific company versus personal use information. That’s all information that could magically appear after we activate our account. The terms of service seem to suggest that there isn’t much of a difference between the accounts. Our best guess points us to the next topic.
8. Taxes and non-profits
There have been a lot of questions about taxes and the ability for a non-profit to use the service to accept credit cards. We haven’t seen any information about discounted rates for organizations but we do know that non-profit support is there and ready to go. As mentioned previously, once you’ve activated your account more features will appear in your profile. Non-profits can input their information into the Tax and Reporting section of the website after they’ve activated the account. We’re assuming that you may be able to enter your EIN or sales tax license number in that section to define yourself as a business… but we haven’t seen it yet, so we don’t know. Remember, you are your business or organization and must be able to legally act for that business in order to create a Square account.
9. Typical legal jargon
No warranty, yada yada, reasonable action to prevent your information from being accessed by unauthorized persons, yada yada, indemnity, yada yada… seriously, if you haven’t seen this kind of stuff before you live under a rock.
10. International users
Yes, it will be available internationally. They’re working on it and starting with a US rollout. Once that’s done and smooth, we’ll see things expand to our friends in different countries. This has been a hot topic on their Twitter account. It’ll come, just be patient.
That’s the biggest thing that’s frustrating us at the moment. We’ve lived on the forums this afternoon reading through everyone’s concerns about the concept, the software, the hardware and the one thing we realized: people suck. The company is giving us free credit card readers, free software and charging us less than a lot of the other per-transaction options out there. It’s surprising that we read gripe after gripe of people who didn’t do a single ounce of research on the forums and more gripes from people who tried but didn’t get anywhere. That’s why we created this post. Hopefully it will answer a lot of questions that you might have about Square. We’ll continue to write information about the process as we get it… our card reader is in the mail so we’ll hopefully have more for you in the very near future. Until then, sit back, relax, have a couple beers and let the hate meter drop down a few ticks. This company is great and needs a little time to catch up and become awesome. Let them do that.
Feel free to read through their FAQs… if there’s a question you have that isn’t list here, it’s probably there. Please follow @Square on Twitter to get some helpful information about their progress. If there’s still a question you’d like answered, feel free to leave it in the comments. We’ll try our best to find an answer and get back to you.