A Comprehensive Review of the Square Chip Reader for Small Business Owners
As the global digital payments industry continues to expand, Americans are ramping up their credit card use. Forbes notes that 84% of American adults possessed at least one credit card in 2021, and by late 2022, they had over 518 million credit card accounts collectively.
Many cardholders made their purchases with the Square reader for contactless and chip cards. This comprehensive overview of the Square chip reader will help you learn how it enables merchants to seamlessly process sales from a countertop terminal or mobile device.
Understanding Chip Card Technology
Most US merchants adopted chip card technology in 2015. Compared to old-style magstripe cards, a chip card features an embedded microchip plus a magnetic stripe. The microchip encrypts the customer’s information so credit card fraudsters will have a harder time skimming the data.
If the issuing bank detects any suspicious card activity, the bank will try to reach the customer. Each issuing bank also offers a robust fraud prevention program. The bank will credit the chip card account if fraudulent charges are verified.
Comparing chip cards and magstripe cards
Occasionally, a small business won’t have a chip card terminal. Therefore, each cardholder must swipe their card’s magnetic stripe at the POS terminal. Cybercriminals can easily hack magstripe card readers and steal cardholders’ data.
Chip-enabled credit card and debit card use
In 2023, merchants in the United States and Canada have embraced the more secure chip card technology. Business owners who haven’t jumped on the bandwagon have likely been limited by financial resources and/or available technology.
Square Chip Reader: The Basics
Now that we’ve covered a bit about chip card technology, let’s take a look at what the Square chip reader has to offer.
Square contactless credit card reader
Squareup.com offers an all-in-one payment option ideal for small business use. This portable Square POS system is designed for in person use at a retail store or restaurant. Field-based business owners, such as craft show vendors or mobile groomers, can use the hardware with a mobile device. The Square reader syncs with Square’s free point of sale app.
Key features and specifications
The versatile Square contactless credit card reader can handle multiple forms of payment. First, the card reader accepts credit card and debit card payments. These include EMV chip cards from Visa, Mastercard, American Express, and Discover.
Google Pay, Apple Pay, and Samsung Pay are accepted. Other contactless (or NFC) payments are also welcome.
Small business users enjoy fast sales proceeds deposits. Money is typically deposited within one or two business days. A small fee enables instant bank account transfers.
The Square card reader uses Bluetooth LE to enable Wi-Fi connections to iOS devices. Examples include the iPhone and iPad (14.0 or higher OS). Newer Android devices are also supported.
Although the standard Square Reader meets most merchants’ needs, two advanced models are available. The Square Register and Square Terminal are worth consideration.
The Square Stand is a POS station
Merchants can also turn their iPads into a POS station with the Square Stand. This sleek device can be placed on a countertop or attached to a nearby wall. Note: All Square products have an A-SKU identification number.
Small Business Pricing and Affordability
Square knows its small business customers value affordable pricing. Given that, Square offers value-priced hardware via direct purchase.
Users must also pay the per-transaction fees at checkout. This expense varies with the type of Square POS app:
- Square POS: 2.6% + $0.10 for each swipe, tap, or dip
- Square Appointments: 2.6% + $0.10 for each swipe, tap, or dip
- Square for Retail (Free Plan): 2.6% + $0.10 for each swipe, tap, or dip
- Square for Restaurants (Free Plan): 2.6% + $0.10 for each swipe, tap, or dip
Square’s 30-day, money-back guarantee for hardware purchases offers small business owners peace of mind. Note: Square has no contracts or monthly fees.
Compatibility with Various Devices and Operating Systems
The Square reader for contactless cards and chip cards supports the iOS operating system. Compatible devices include the iPhone and iPad. The Square reader is also compatible with newer Android operating systems.
Also, the Square chip reader has a beefy built-in battery and a good charger. This 2nd generation battery can power 20% more transactions on one charge compared to the 1st generation reader.
When merchants must accept magstripe cards at a POS terminal
The Square chip card reader doesn’t accept magstripe payments. Fortunately, Square provides a magstripe card reader at no charge. This reader comes with a headphone jack or Lightning connector.
Merchants should download Square’s free point-of-sale app. Next, they should install the headset jack or Lightning connector. Finally, they should enable Bluetooth.
Benefits of the Square Chip Reader
The Square chip reader accepts multiple types of card payments. Examples include contactless payments (or NFC payments). Users also enjoy several desirable benefits.
Square’s point-of-sale app ensures the encryption of customers’ payment information. Card-present payments benefit from end-to-end data encryption. Two-factor verification, and 24-hour card fraud prevention, also help ensure customer account security. Finally, Square resolves all payment disputes free of charge.
Equally importantly, Square handles all merchants’ PCI compliance requirements. Because Square combines all merchant accounts into one aggregate account, ensuring group PCI compliance makes the most sense.
Ease of use
Even first-time users will find the free Square point of sale app and Square Reader easy to use. The quick, seamless setup enables customers to accept payments within minutes. Merchants can monitor orders, run reports, and manage inventory from the primary dashboard.
The Square reader is compatible with mobile devices. Square ensures that the app syncs with well-known delivery services. Examples include DoorDash, Chowly, Caviar, Postmates, and others.
Square contactless and chip card reader payment methods
The Square card reader accepts EMV debit card and credit card payments from major card issuers. Examples include Mastercard, Visa, Discover, and American Express. Gift cards and rewards cards are also accepted.
Contactless card payments are also welcome. Examples include Apple Pay, Google Pay, and Samsung Pay. Other NFC payments (or tap-to-pay payments) are accepted.
Reporting and analytics
The Square contactless and chip card reader offers real-time analytics. Merchants can monitor their sales history and process refunds through the Square website or app. They can also send files to business accounting programs.
Drawbacks of the Square Reader for Contactless and Chip Cards
The Square reader does have some downsides. First, merchants must use the hardware with a Square account. Merchants have reported substandard NFC transaction customer support. Finally, account holds and closures are fairly common.
Square Card Reader Customer Support
Square offers a well-rounded suite of support services. In fact, Square offers better support services than many traditional merchant service providers.
The company’s knowledge base contains informational articles, troubleshooting advice, and walk-throughs for multiple functions. Square also provides guidance on operating the company’s varied hardware components.
Square offers telephone support Monday through Friday, which isn’t ideal for businesses with weekend hours. In addition, email support is available for non-urgent questions that can wait for an answer.
Surprisingly, Square does field certain support inquiries on the company’s Facebook page. Customers with general questions may find answers here. However, social media-based support services are not meant for account-specific issues.
Square Chip Card Reader Reviews
The Square reader for contactless and chip cards has its share of positive and negative customer reviews. Merchants should decide what’s most important when using a card reader to process payments.
Positive customer reviews
The Square chip card reader gets good reviews for its durable hardware, easy-to-use software, and affordable price. The device’s easy payment acceptance and general functionality also draw positive customer comments.
Negative customer reviews
Some users have noted that the Square terminal has connectivity issues. Next, the Square reader for magstripe cards cannot be used with recent Android hardware. Finally, Square has been known to withhold merchants’ funds (or deactivate a user’s account) without an apparent reason.
Payment Depot’s Suite of Services is Worth Consideration
Many merchants desire a full-featured payment services provider with robust data security. Payment Depot serves this growing market. The company offers membership pricing with no contracts, nuisance fees, or cancellation fees.
Equally importantly, Payment Depot’s customer support always gets glowing reviews from US small business owners. To learn how your business may benefit from our services, contact us today.
FAQs about Square Chip Reader
Q: What is the Square chip reader?
The Square chip reader is a portable device that allows merchants to accept chip card and contactless payments. It is compatible with mobile devices and Square’s free point-of-sale app.
Q: What is a chip card, and why is it more secure than a magstripe card?
A chip card, also known as an EMV card, contains an embedded microchip that encrypts the customer’s information, making it more secure against card fraud compared to traditional magstripe cards. Chip cards are harder to skim, reducing the risk of data theft.
Q: What types of payments does the Square chip reader accept?
The Square chip reader accepts the following types of payments:
- Chip cards
- Contactless payments (e.g., Apple Pay, Google Pay, Samsung Pay)
- Magstripe cards (with the optional Square magstripe card reader)
Q: Are there any drawbacks to using the Square chip reader?
Some users have reported the following drawbacks to using the Square chip reader:
- Substandard NFC transaction customer support
- Account holds and closures
- Connectivity issues
Q: What support options are available for small businesses using the Square Chip Reader?
Square provides a range of support services, including a knowledge base with informational articles and troubleshooting advice, telephone support on weekdays, and email support for non-urgent queries. They also engage with customers on their Facebook page.