Downsides of Square POS System

Launched in 2010 as Square Register, Square now has approximately 2 million sellers using its point of sale platform. Square’s popularity is likely due to it being seen as a fin-tech alternative to tradition payment processors, allowing smaller businesses easier access to accept credit card payments from their clients. With all the hype, some may be inclined to sign up for Square as a point of sale system without knowing some of the common complaints and risks. Here are some of the most common complaints we hear from customers switching from Square to QuickBooks Point of Sale.

Withheld Funds

One of the biggest caution that businesses need to consider before going with Square as their point of sale system is their withholding policies. The reason for this is that Square does not employ a traditional underwriter procedure. Instead, they have a streamlined process where accounts can be opened with no human interaction. While some might see this as a positive to get your account up and running more quickly than other POS systems (and avoid pushy salespeople), the risk is that when you receive your first large transaction or if you have a one-off larger-than-usual transaction, Square will put your funds on hold until they decide you are not a risk.

There have been numerous complaints due to Square holding funds, and even canceling accounts. In fact, the Better Business Bureau (BBB) has received over 1,100 complaints regarding fund-holding disputes. Because there is always that underlying possibility that your funds can be held so easily without any prior warning, and that Square actually allows the transactions to go through, merchants have complained of misleading marketing by the company. Square has responded, citing only that these policies are stated in their Terms and Conditions. However, we all know that terms and conditions can be incredibly long and confusing. It is essentially that you select a point of sale system that understands your business model and so does not withhold funds unnecessarily.

Not scalable and is counter-intuitive to business

Square’s policies for withholding funds and abrupt cancelation of accounts consequently limits the business that is utilizing the point of sale system. Although automation and algorithms are intended to advance technology and make running your business easier, this does not seem to be the case for Square. In fact, their policies almost hinder a business from growing. For example, users who have complained about their policies have talked about taking measures such as “not charging higher than usual” or “not deviating from normal transaction volume.” Therefore, if a business has a busy month, with more than the average transaction volume, or launches a premium product that is significantly more expensive than what your Square account recognizes, your funds are at risk of being held. This hampers growth!

Lack of Support and Customer Service

In our previous blog post, How to Choose a POS System, we talked about the importance of support and how the SaaS model makes it easier to deliver assistance. Unfortunately, with Square, that is not the case. Square relies heavily on conducting their customer support through email, their support forum, and social media. In addition, numerous users have reported several days until they receive a response, and some merchants have complained that Square’s customer service has failed to respond to their queries in a satisfactory manner. To many business owners, the support available to them is crucial to running their business, especially for those who are not so tech-savvy. This is typical of a startup mentality, since these businesses rely on low overhead costs to drive growth. Robust customer service teams drag down their margins and thusly are usually avoided. But that doesn’t benefit you the customer.

There is a customer support phone line that runs from 6 a.m. to 6 p.m. However, to be able to reach an actual representative, you must request and receive a code from the Square website. These codes are only given to active merchants. What does this mean? It means that if for whatever reason, your account has been deactivated (and as discussed earlier in this article, it can happen!), you will be unable to reach the company by phone. This is quite ironic as merchants with deactivated accounts are probably the ones who need to speak with customer support the most. Considering the high implications of not being able to reach anyone in tech or account support, this is one of Square’s major downfall. Needless to say, Square is devoid of reliable and solid customer support system, something that should be expected from SaaS POS systems nowadays.

Numerous Cases of Phishing Scams Reported

Because the mode of support provided by Square is mostly done through email and social media, your business can easily be exposed to security risks. So much so the BBB has issued a scam alert. It has been reported that some users receive emails from Square regarding non-existent accounts claiming that there is a problem depositing funds into their account, and asking customers to supply their account details. Some emails also ask you to click on links where malware can be downloaded to your computer and whatever sensitive information you have stored can be exposed.

When choosing a point of sale system for your business, it is important to understand the system’s ins and outs. Knowing what could go wrong in your daily operations allows you to assess if the POS is the best fit for your business, especially when its implications can cause large financial losses. Square’s policies for withholding funds and closing accounts, limitation to business transactions, the lack of support, and the sprouting phishing scams are their biggest downfalls.

For this reason we really recommend going with a more established point of sale system like QuickBooks Point of Sale and a payment processor like Intuit or Vantiv. These businesses are more established, secure, and have excellent customer service. Contact us to find the QuickBooks Point of Sale system that will work best for you.