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Advantages and Disadvantages of the Use of Square on Businesses

Are you a local business owner in the San Francisco Bay Area? Have you considered offering your customers flexible payment options? With a free app and a card reader that plugs into your iPhone, Android smartphone, or iPad, Square offers small businesses owners a simple method for accepting customer credit cards and debit cards from American Express, Discover, MasterCard, and Visa. Here are three major advantages for using Square’s technology for your local business in the Bay Area:


  • Transparency and Affordability


Square has revolutionized the payment industry by offering one rate to all business owners. While credit card transaction fees can amount to hundreds or thousands of dollars each month, Square charges a flat 2.75% transaction fee per swipe or a 3.5% fee plus 15 cent surcharge when transactions are keyed in manually. Because many competitors’ fees are complicated and difficult to understand, small business owners in the Berkeley area can rely on the simplicity of Square’s fees. Because keeping costs low is an important factor for any small business, the affordability, transparency, and simplicity of this pricing plan is attractive to many merchants.


  • Simplicity and Customer Experience


With the Square app and a smartphone or iPad, Square provides merchants the ability to accept credit and debit card purchases anywhere and anytime. The customer will swipe the card, sign on the screen, and immediately receive a receipt for their purchase via text message or email. Because square processes payments directly, no third-party processing services are required and payments are posted to your business’s account the next day.


  • Analytics


Square provides free advanced analytics for businesses, including an online dashboard that tracks detailed sales data. Merchants can look at charts that analyze day-to-day or monthly performance, tracking what items are selling well and when stores have the most customers. These analytics can help businesses make efficient decisions about stock orders, store hours, as well as staffing needs. The Square charts may show that your local coffee shop is most busy on Friday afternoons. You can utilize the data provided and come up with a solution for increasing efficiency, such as hiring an extra barista solely for Friday afternoons.


Although the Square App provides a cutting-edge payment option with advanced analytics that can help your local business in the Bay Area improve efficiency, there are a number of disadvantages that should be noted as well. There are two major complaints that have surfaced repeatedly:



  • Random Fund Holds on Large Transactions


Because Square does not verify the credit history of its customers, it sets limitations to avoid potential losses. Numerous complaints have surfaced regarding Square placing automatic holds on funds. These sudden holds on large or suspicious transactions were often placed without providing advanced notice to merchants, resulting in confusion and potential losses for business owners. Additionally, merchants have also reported random account deactivation with no explanation from Square.


Until November 2013, Square placed hold on funds if more than $2002 was charged within any seven-day period. This policy was not publicly disclosed, generating a lot of misunderstanding. Although Square has claimed to remove this policy, this may not be entirely true.


  • Lack of Customer Support


In addition to random automatic holds on transactions that were deemed suspicious, Square has offered virtually no live customer support for merchants. Although customer support is provided via email, support forum, or social media, many local business owners view this as an inefficient process. If an Oakland or Berkeley local business owner were to run into issues with hardware, software bugs, or billing disputes, these issues may go unresolved for extended periods of times, which may be severely disruptive to the merchant’s business.


For local business owners in the San Francisco Bay Area, Square has a lot of advantages to offer. With affordable and transparent transaction fees, simple and straightforward customer experience, and free analytics, Square offers a multitude of benefits that local business owners can take advantage of. However, it is important to note that Square is working on a number of limitations such as their random fund holds and lack of live customer support.



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Summary of Piedmont Avenue Services

  • Business Development Consulting
  • Customer Experience; Loyalty Marketing Programs
  • Brand Awareness and Positioning
  • Business & Sales Strategy
  • Internet Social Media Marketing
  • Website and Internet Marketing Optimization
  • Managed Marketing and Email Services
  • Creative Front of Mind Customer Interactions
  • Streamlining Operations; Technology Integrations

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