What cards does Square not accept?

Square is one of the most popular credit card processors, making it easy for small businesses to accept payments both in-person and online. However, Square does have some limitations on the types of cards and payment methods it can process. In this comprehensive guide, we‘ll cover exactly what cards and payment types Square does not accept and look at the reasons why.

To summarize, the main payment types that Square does not support include:

• Prepaid debit cards without Visa, Mastercard, Amex or Discover logos
• Private label gift cards (retailer-specific cards)
• PayPal payments
• Paper checks
• Cryptocurrency payments
• Direct payments through peer-to-peer apps like Venmo, CashApp, Zelle
• Foreign credit cards without Visa, Mastercard, Amex or Discover logos

Let‘s take a detailed look at each of these unsupported payment types and why Square doesn‘t accept them.

Prepaid Debit Cards

Square does not accept prepaid debit cards that do not have a Visa, Mastercard, American Express or Discover logo. This includes many prepaid gift cards, as well as some payroll and government benefit cards.

The card must be directly affiliated with one of Square‘s supported card networks in order to work with the service. Square utilizes Visa, Mastercard, Amex and Discover‘s processing networks to authorize payments, so the card itself needs to be tied to those networks.

Many prepaid cards utilize alternative payment networks like STAR or NYCE that are not supported by Square. According to 2021 statistics from the Mercator Advisory Group, an estimated $421 billion was loaded onto prepaid cards in the U.S. last year, representing a significant portion of payments.

By not accepting network-branded prepaid cards, Square misses out on a subset of customers who may rely on these payment methods. Competitors like PayPal do not have this limitation, giving them access to more customers.

Private Label Gift Cards

In addition to open-loop prepaid cards, Square also does not accept closed-loop gift cards issued by specific retailers. This includes gift cards for popular merchants like Target, Walmart, Amazon, Starbucks and many more.

These retailer-specific gift cards are also known as private label gift cards. Funds are stored directly on the card rather than being affiliated with a processing network like Visa or Mastercard. Square only supports gift cards that have branded Visa, Mastercard, AmEx or Discover logos on them.

According to Mercator Advisory Group, closed-loop gift card sales reached $585 billion in 2021. Not accepting retailer gift cards is a significant limitation for Square, preventing customers from tapping into funds they may have received as gifts.

PayPal

One of the most common questions surrounding Square is whether it accepts PayPal. Unfortunately, PayPal cannot be used directly for Square payments. Customers can not pay a Square invoice or process transactions through their PayPal balance.

Square only allows a debit or credit card linked to a PayPal account to be used for payment. But direct PayPal account funds are not enabled.

This contrasts with PayPal, which does allow users to take payments through their Square balance if it is linked to a PayPal account. Not accepting direct PayPal payments cuts off access to PayPal‘s 35 million merchant accounts and 377 million active consumer accounts worldwide.

Paper Checks

As an electronic payment processor, Square does not accept old-fashioned paper checks as a payment method. All transactions must be processed as card payments or through digital wallets.

In the United States, around 16 billion checks were paid in 2021, showing they are still used by many consumers and businesses. Not being able to accept checks may limit Square‘s usefulness for some businesses dealing with more traditional clients who prefer checks.

Cryptocurrency

Cryptocurrencies like Bitcoin have grown exponentially in popularity in recent years. But Square does not allow merchants to accept crypto payments at this time. All transactions must be done in fiat currency using supported payment cards and bank accounts.

Square does have limited cryptocurrency functionality through its CashApp. But crypto cannot be used to pay Square sellers directly. Competitors like BitPay and Coinbase Commerce do enable crypto payments, giving them access to the fast-growing crypto market.

Mobile Payment Services

Square also does not support direct mobile payment types like Venmo, Zelle, Cash App or Apple Cash. Customers cannot pay Square sellers using their balance on these mobile apps. The funds must come from a debit card, credit card or bank account linked to the mobile payment service instead.

This cuts out the convenience of having funds instantly transferred from a user‘s mobile wallet. Platforms like PayPal do allow direct mobile wallet payments, making it easier for consumers to pay without entering card details.

Foreign Cards

One limitation of Square‘s card processing network is that it may not reliably accept cards issued outside of the United States. While Square claims to accept some internationally issued cards, foreign cards with Visa, Mastercard, Amex and Discover logos do not always work.

This is because Square utilizes U.S. issuing banks to authorize payments. Support for foreign transactions is inconsistent. So international sellers who need to reliably accept payments from customers worldwide may run into problems with Square.

Why Does Square Have These Limitations?

The main reason Square places restrictions on certain payment types boils down to how its underlying payment processing infrastructure works.

Square has partnered with issuing banks in the U.S. to be able to accept Visa, Mastercard, Amex and Discover cards as a payment processor. These bank and card network partnerships enable Square to authorize and settle card transactions.

Any payment method outside of those four card networks is not consistently supported. Square also does not directly integrate with alternative payment services like PayPal because those services handle their own payment processing and funds settlement.

So unless the card or payment network has a direct partnership with Square, transactions cannot be reliably authorized. The trade-off for Square having simplified pricing and signup is limited payment options.

Are the Limitations Problematic for Businesses?

The card and payment limitations with Square may be problematic for certain types of businesses. Here are some examples:

• Retail stores – Not being able to accept major retailer gift cards cuts out a lot of potential business. Customers want to be able to use their gift card funds easily.

• Contractors – Many contractors still receive a large number of checks from customers. Not accepting checks could be inconvenient.

• Non-profits – Prepaid cards are commonly used to distribute funds to the unbanked. Charities may miss out on donations if prepaid cards aren‘t accepted.

• International sellers – Cross-border businesses will run into inconsistencies taking foreign credit cards with Square. Better support is needed for global payments.

• Advanced sellers – Larger enterprises may prefer integrated solutions like PayPal that offer more flexibility and payment types.

On the other hand, for many small businesses who deal primarily in standard Visa/MC/Amex credit card payments from U.S. customers, Square‘s limitations may not pose much of an issue. But it‘s important to be aware of what payment types are not supported before committing to using Square.

Summary of Payment Methods Not Accepted by Square

The Bottom Line

Square offers an easy way for many businesses to begin accepting credit card payments without complex contracts or setup. But its lack of support for prepaid cards, gift cards, PayPal, checks, and foreign transactions may be a deal-breaker for some merchants.

Make sure to carefully assess your business‘s payment needs before choosing a card processor. Weigh the benefits of Square‘s simplified pricing against any limitations that impact your customers‘ payment preferences. There are other merchant services like PayPal or Stripe that may provide more payment flexibility for an added cost.

No single card processor is ideal for every business. Do your research to find the right fit based on your industry, customer base, average transaction size and growth plans. With an understanding of its limitations, Square can be a cost-effective credit card processing option for small, U.S.-focused businesses. But other solutions may serve you better as your business expands over time.