Payments. Ecommerce. Profits.

How Does Square Make Money?

Square is a branch of Block Inc. that provides financial services to different businesses. The aim of the company is to help everyone whether it be a low scale business or a large scale company. But Square works best for low scale business.

The company makes money from the services it provides to its customers. In general there are 10 ways in which Square generates revenue for the company. It is a financial, software and payment service provider. Below we plunge in the company details and ways Square makes money, let’s see its origin.

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What Is the Square Business Model?

Square’s business model was found on a simple assertion. Square charges a flat fee of 2.75% on every card transaction despite the size or type of the card used. Its simple and easy fee structure has helped Square stand on top as the most prominent mobile payments company in the world.

Today, Square has grown surprisingly well. It brought out the company’s managed payment services that help increase the company’s revenue. Square makes money from the pos services it provides to its customers. The point of sale ( POS ) system includes a square card reader, software for tracking inventory, Square register, and sales. It also offers a P2P cash app.

History of Square Inc.

Square was founded by Jack Dorsey and Jim McKelvey in 2009. They brought good news to small businesses as it became easy for them to accept credit card payments. At that time, small businesses had to include third party providers to accept card payments be it a credit or debit card. Square currently holds a 53% of the market share of over 2 million customers.

In 2022, Square generated a gross profit of $783 million. The company’s gross profit has increased at a high rate. But the question is, which service does Square make money from the most? Is it the cash app or processing fees or the hardware and software tools. To find out, let’s discuss the company’s services and ways the company generates revenue streams.

Ways Square Makes Money

As mentioned earlier, there are a total of 10 ways Square generates the company’s revenue.

Square Payments

One of the key sources of the company’s revenue is Square payments system or what the general public calls it, the processing fees.

In 2019 Square payment processed a total of $106.2 billion in GPV from nearly 2.3 million card payments. A total of 407 million were used for the total transaction. Square charges a transaction fee according to the following:

  • In-person transactions (POS services) : 2.6% + $0.10 transaction fee
  • Online Payments : 2.9% + $0.30 per transaction
  • Manually entered Payments : 3.5% + $0.15 transaction feenot a high profit business for Square.

Cash App

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Square cash app was launched in Oct 2013. The financial services offered by their cash app are wonderful. This app allows users to send and receive payments with a 3% fee if payments are made through credit cards.

In 2020 cash app revenue accounted for 62% of Squares total revenue of $9.5 billion. In short we can say that the Cash app generates most of the company’s total revenue.

Renting and Selling Hardware

Squares renting and selling hardware revenue comes after the revenue generated from the Cash app. Square allows you to either buy or rent their hardware. If you’re looking forward to renting the hardware, you can do so through Fello. Fello has paired with Square and fulfills all of their rental equipment orders.

The different types of hardware provided by Square and their per product prices and rental is mentioned below.

  • Square Register

Square register is a fully integrated point of sale system. It comes with 24/7 phone support and a two year warranty. It allows you to accept payments even if you are offline.

  • Square Register Price

If you buy the register it will cost you $799 only. If you plan on renting it, it will cost you around $39/month.

  • Square Stand

Square stands allow you to make business easy. The Square stand comes with a USB hub and a built-in Bluetooth connection. You can add a barcode printer etc. to it.

  • Square Stand price

The square stand will cost you a total of $149 or $14/month.

  • Square Terminal

Square terminal is the fastest and the most secure credit card machine in the market at present. With Square terminal you can ditch your old credit card machine and enter the world of newest technology.

  • Square Terminal Price

Square terminal costs $299 or $27/month.

  • Square Reader for Chip & Contactless Payments

Square reader is the easiest way to accept chip cards and contactless payments. You either have to dip the card or tap for a contactless payment.

  • Square Reader Price

Square reader costs you a total of $49, but there is no monthly package for it.

  • Square Reader for Magstripe

You can plug in the reader to your device and accept card payments with just a simple swipe.

  • Square Reader for Magstripe Price

This costs you no more than $10.

Square Capital

In 2021, Square capital was launched by Square Inc. that provides loans to Square merchants. Square Financial Services is a subsidiary of Square Inc. It provides business loans ranging between $300 up to $100,000. 

The merchant has to pay a one time only fee, known as origination fee.Square Financial Services fee is around 10% to 16% of the loan.


Square has made efforts to stand on top by providing its users with different services that come with a little service fees. It works as the best in terms of payment services between buyers and sellers. Square is now called Block Inc. and its different services combined feed the $12 billion business revenue. 

It is estimated that by the end of 2026 digital payments will reach up to $13.19 trillion, with that being said, Square is considered to be in the best position to capitalize with this growth.

That brings us to the end of this post. We hope this article answers all your questions. If not, check out our knowledge base for payments