Square Issuing V2 Evaluation: Real Fees and Account Risks (2026)

Square Issuing V2 Review: Full Evaluation of Fees, Fund Holds, and What Merchants Over $25K/Month Actually Pay

TL;DR: Square Issuing V2 is not an official Square product — it's what merchants search when evaluating Square's payment processing platform. Square uses flat-rate pricing that costs a $50K/month restaurant roughly $3,000/year more than interchange-plus. It bans 30+ merchant categories, has zero LATAM presence, and holds funds 90–180 days when it closes accounts. For low-volume US merchants under $20K/month in a standard category, Square is a reasonable starting point. Above that threshold, the math stops working in your favor.

The short answer: Square is a payment aggregator built for easy onboarding, not for merchants who process real volume. If you process over $25K/month, you're paying a flat-rate premium that grows with every dollar you run through it.

What "Square Issuing V2" Actually Means

Square Issuing V2 is not an official Square product. Search Square's developer documentation or pricing pages and you won't find it. The term comes from merchants evaluating Square's current payment processing platform, which runs on Square's v2 Payments API. When that query clusters in Google and AI search tools, it's merchants looking for a real evaluation — not a features list, but an honest accounting of what Square costs, where it fails, and when to move on.

How Square Prices Payment Processing in 2026

Square charges flat-rate bundled fees across three plan tiers. Interchange-plus is not available at any volume.

Source: Square Support article 5068, accessed July 2026, confirmed May 2026

Three things in that table matter more than the headline rates.

Square raised the Free plan online rate from 2.9% to 3.3% effective January 13, 2026 — a 14% increase on online transactions, with limited advance notice. If you sell online and haven't audited your statement since last year, you've already absorbed that increase.

"Custom pricing" exists, but only at $250,000/year in volume (around $20,833/month), and it's still flat-rate. You never get the cost-plus transparency of interchange-plus pricing, where the network's actual charge and the processor's markup appear as two separate lines. Square bundles both and calls it a single rate.

The keyed rate — 3.5% + $0.15 — is identical across all three tiers. Phone orders and card-on-file transactions cost the same whether you pay $0/month or $149/month. For merchants running significant phone or email order volume, virtual terminal pricing on interchange-plus shows what that rate gap actually costs per month.

Additional fees: foreign-issued cards carry a 1.5% surcharge. Instant transfers cost 1.95% per transfer. Gift card loading runs 2.5% (waived only on Premium). For a full breakdown of Square's gift card product and how it compares to dedicated alternatives, see our Square Issuing V2 gift card review.

What Square Actually Costs at Real Volume

Take a restaurant doing $50,000/month in card volume — roughly $40,000 in-person and $10,000 online, around 1,400 transactions at a $35 average ticket.

Square Free: $1,627/month — $19,524/year Square Plus: $1,596/month — $19,155/year Interchange-plus at 0.25% + $0.10 markup: $1,351/month — $16,209/year

Square Plus saves $31/month over Free after the $49 subscription. Interchange-plus saves $245/month over Square Plus.

That's $2,946/year at $50K/month. At $100K/month the gap approaches $6,000. At $250K/month, you're looking at $12,000–$15,000/year staying in Square's pocket instead of yours.

"We run the math for every merchant we onboard," said Kaleb Dickhaut, Founder of ClickWerxs. "At $50K/month, the first-year savings from switching cover the setup cost with room left over. The merchants it costs the most are the ones who've been on Square for two years and assumed their rates were competitive."

Interchange-plus beats every Square tier at any volume above roughly $25,000/month on a competitive ISO markup. Below $10,000/month, Square Free holds its own — zero monthly fee and low per-transaction volume keeps the total reasonable. The $10K–$25K range depends on your card mix and average ticket.

For a full breakdown of how interchange-plus pricing works, see our interchange-plus pricing guide.

Square's Account Stability Problem

Square's Payment Terms spell out the authority clearly. Section 12 allows Square to "defer payout or restrict access to your Proceeds, temporarily or indefinitely." Section 14 grants Square the right to raise, reduce, or remove reserves "at any time...in its sole discretion" with no prior notice. Section 37 states: "Square may terminate your use of the Payment Services at any time for any reason." (Square Payment Terms, accessed July 2026)

That language isn't unusual for payment aggregators. The gap between the policy and what happens in practice is where the real risk lives.

937 BBB complaints were filed against Square in the past 12 months. The BBB complaints page documents specific cases: a 180-day hold placed October 2025 on funds still unreleased as of May 2026; a $14,800 hold imposed after a first flagged transaction (March 2026); and multiple 90-day holds on merchants with zero chargeback history. NerdWallet's Square review (Hillary Crawford, updated July 2025) identifies merchant account holds as "the biggest concern" with choosing Square, noting they "can last anywhere from days to months." Square's own community forum documents a pattern of holds across consecutive invoices with no explanation provided after more than 25 support contacts. Those are seller-reported accounts on a public forum rather than verified cases, and they are cited here as evidence that the complaint is common and public, not that any individual account is confirmed.

Support access is plan-gated in a way that compounds the problem. Free plan merchants get phone access for the first 90 days only. After that: email with 24–48 hour response windows, or live chat during business hours. Merchants whose accounts are closed lose phone access entirely — at the exact moment they need it most.

This is the structural risk of the aggregator model. Your account is pooled with millions of other businesses. When Square's risk systems flag your account, your funds can be held under policies that are deliberately vague. A dedicated merchant account is underwritten individually. Fund holds are governed by your specific merchant agreement, not by network-wide risk decisions.

What Square Won't Process

Square prohibits or restricts more than 30 merchant categories. For the ClickWerxs audience, the most relevant:

Fully prohibited:

• Firearms and ammunition
• Money transmission without state licensing
• Unlicensed gambling
• Pyramid and multi-level marketing structures

Conditionally approved, high deactivation risk:

• Cannabis, CBD, hemp
• Adult entertainment
• Tobacco and e-cigarettes
• Nutraceuticals and dietary supplements (non-FDA-approved)
• Debt collection
• Telemarketing and subscription businesses
• Credit repair and financial services

The pattern in restricted categories matters. Merchants sometimes receive initial approval, then get terminated months later with funds held and no appeal process. That's a worse outcome than an upfront decline — you've built operations on a processor that can exit without warning.

Geography is its own constraint. Square operates as a registered processor in exactly 8 countries: US, Canada, Australia, Japan, UK, Ireland, France, and Spain. It has no presence in Mexico, Colombia, Brazil, or anywhere in Latin America. US merchants can accept foreign-issued LATAM cards but pay a 1.5% surcharge, and settlement is USD only.

For high-risk MCCs that Square won't touch, see our high-risk merchant accounts page.

Where Square Actually Works

If you process under $15,000/month, run a single US location in a standard retail or food service category, and don't need support outside business hours — Square Free is a reasonable call. Onboarding is same-day. The POS handles inventory, time clocks, and basic reporting. The $59 contactless reader gets you accepting tap and chip immediately.

The hardware is capable for what it is. Square Terminal at $299 handles receipts and payments in one unit. Register at $899 runs a dual-screen setup suited for retail. In-house financing is available with no external lease required.

Square's problem isn't product design. It's the pricing model and the aggregator structure. Both work at low volume. Both start working against you as the business scales.

How ClickWerxs Compares

For merchants with US and LATAM operations, local acquiring in 52 countries means transactions settle in-country — better approval rates, lower effective interchange, no foreign-card surcharges. Square can't offer that.

Get a quote from ClickWerxs — we'll run the interchange math on your actual card mix and volume.

The Verdict

Square is a well-designed product for merchants starting out. Fast onboarding, decent hardware, pricing that's easy to read.

That simplicity has a dollar cost. At $50K/month it's $3,000/year. At $200K/month it's closer to $10,000. And pricing is only part of the issue. The aggregator model means your account stability runs through Square's risk algorithms, not through your processing history. The fund hold cases from early 2026 aren't edge cases — they're what happens when a growing business outgrows the product it started on.

The merchants who gain the most from switching are usually the ones doing $25K–$500K/month who've been on Square for two or three years and assumed the rates they started with are still competitive. Usually they're not.

If that's your situation, get a quote. We'll show you the actual interchange breakdown for your card mix — real numbers, not a sales estimate.

Frequently Asked Questions

What is Square Issuing V2?

Square Issuing V2 is not an official Square product name. It's a merchant search term for Square's current payment processing platform, which runs on Square's v2 Payments API. When merchants search "Square Issuing V2," they're evaluating Square as a payment processor — its fees, account terms, and reliability — not a product Square has branded with that label. (Source: developer.squareup.com, May 2026 — no product named "Square Issuing V2" exists in Square's documentation.)

Does Square offer interchange-plus pricing?

No. Square uses flat-rate bundled pricing across all three plan tiers. "Custom pricing" is available at $250,000+/year in annual volume, but it's still flat-rate — a marginally lower bundled rate, not interchange-plus. With interchange-plus pricing, interchange cost and processor markup appear as separate line items. That transparency is not available through Square at any volume. (Source: Square Support article 5068, accessed July 2026, May 2026.)

How much does Square cost for a $50K/month merchant?

A restaurant processing $50,000/month (80% in-person, 20% online, roughly 1,400 transactions) pays approximately $1,596/month on Square Plus or $1,627/month on Square Free. Interchange-plus at a 0.25% + $0.10 markup runs approximately $1,351/month for the same volume and card mix — a difference of about $3,000/year. Rate calculations based on Square Support article 5068, accessed July 2026, May 2026; interchange rates based on Visa and Mastercard published schedules.

Can Square freeze or hold my funds?

Yes. Square's Payment Terms (Section 37) allow termination "at any time for any reason" and Section 12 authorizes indefinite fund holds with no prior notice required (Square Payment Terms, accessed July 2026). BBB complaints document a 180-day hold placed October 2025 still unreleased as of May 2026, a $14,800 hold after a single flagged transaction (March 2026), and multiple 90-day holds on merchants with zero chargeback history (BBB complaints page). NerdWallet (July 2025) identifies merchant holds as Square's primary risk, noting they "can last anywhere from days to months." Phone support access is also revoked for deactivated accounts. This is a structural feature of the aggregator model: your account is pooled with other merchants, so Square's risk decisions about the pool can affect your funds.

Does Square work in Latin America?

No. Square operates as a registered payment processor in only 8 countries: US, Canada, Australia, Japan, UK, Ireland, France, and Spain. It is not registered in Mexico, Colombia, Brazil, or any Latin American market. US merchants can accept foreign-issued LATAM cards but pay a 1.5% surcharge, with USD-only settlement. (Source: Square developer documentation, May 2026.)

What merchant types does Square prohibit?

Square prohibits or restricts more than 30 merchant categories. Fully prohibited: firearms and ammunition, unlicensed gambling, money transmission without state licensing. High deactivation risk: CBD and cannabis, adult content, nutraceuticals, tobacco, debt collection, telemarketing, and financial services. Merchants in restricted categories sometimes receive initial approval and are terminated months later, with funds held during the dispute. (Source: Square Payment Terms, accessed July 2026, May 2026.)

ClickWerxs is a registered ISO partner. We earn a share of processing revenue from merchants we onboard. Interchange rates are set by Visa and Mastercard and adjust twice yearly (April and October). All rate calculations use rates confirmed as of May 2026 and are illustrative — actual rates depend on your card mix, MCC, monthly volume, and negotiated markup. This post does not constitute legal or financial advice.

Kaleb Dickhaut — Founder, ClickWerxs. Kaleb works directly with merchants to identify and eliminate unnecessary payment processing costs.
linkedin.com/in/kaleb-dickhaut

Sources

1. ClickWerxs blog, first-party data — Search Console, Bing Webmaster and GA4 figures in this post are measured from ClickWerxs's own properties over the stated period. They are a past result for one domain in one vertical and are not a projection of what any other site will achieve. Operator data.
2. Competitor and platform pricing referenced in this post is taken from each company's published pricing or legal pages as of the date noted in text, and is subject to change without notice. ClickWerxs does not link to competitor websites; references are given in text so they remain verifiable. No affiliation is implied.

ClickWerxs sells SEO and AI visibility services and earns revenue from those engagements. First-party figures are past results for this blog and are not a promise of future performance. This is operator opinion, not professional advice.