The Square Card Reader functions by transforming a merchant’s smartphone or tablet into a versatile Point of Sale (POS) system. It is designed to process various payment types, including swipe, dip (EMV chip), and tap (contactless). Here is a step-by-step overview of how it works: 1. **Connection:** The portable device connects to the mobile device (running iOS or Android) via Bluetooth (or audio jack for older models), ensuring a seamless link. 2. **App Integration:** The merchant uses the Square Point of Sale app, which serves as the digital interface for managing transactions, inventory, and reporting. 3. **Transaction Processing:** The merchant enters the transaction amount in the app. When the customer pays, they insert their chip card, swipe the magnetic stripe, or tap their contactless card/phone on the Square Card Reader. 4. **Secure Handling:** The reader handles the secure processing of credit or debit card data. 5. **Data Flow:** The system then seamlessly integrates with the Square platform (squareup’s backend) for secure, app-based transactions and compliance with PCI security standards. 6. **Confirmation:** Once approved, the merchant can email or print a receipt for the customer. Key features include no monthly fees and transaction rates starting at 3.5% (or 2.6% + 10¢ per sale for quick swiped transactions).

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