Letting anyone accept Apple Pay, Android Pay and credit cards on-the-spot, Square's tiny contactless reader puts a pop-up store in your pocket.

Despite what people say, there's no shame in being a cash-only small/micro business if your regular customers are happy with that arrangement. You shouldn't need to pay for merchant facilities at your shop or market stall just because hipsters think they're too cool to carry cash.

That said, there might come a day when you realise that your cash-only policy is actually costing you money, especially if you're in a touristy area. That's when Square's tiny contactless reader can save the day without costing you a packet.

This palm-sized reader costs $59 with no monthly fees, instead you pay 1.9 per cent of each transaction with a $1 minimum purchase and the option of adding GST. You can also use Square to send invoices, with Square taking a 2.2 per cent slice of the action.

All this means that if you only use the Square reader to accept payments occasionally then it's not sitting in the drawer costing you money. That makes it a great fit for everyday people who run micro-businesses, from market stalls to pet walking. If you'd be using it regularly then it's worth weighing it up against rival merchant facilities with different fee structures.

One in the hand

Square's appeal isn't just cost, it's also convenience. The reader works with iOS and Android devices, connecting via Bluetooth. There's a built-in rechargeable battery and you can sit a charge cradle alongside your checkout. Square even throws in a sticker, letting customers know that you accept card and smartphone payments.

Along with accepting tap n' go payments such as Visa PayWave, Mastercard PayPass and smartphones, there's a card slot for chip n' PIN transactions. Square also throws in its old magswipe card reader although it's of little use in Australia as we're phasing out magswipe transactions.

Setting up the Square reader is really straightforward, you can start accepting payments straight away but it takes a few days to link to your Square account to your bank account. After that payments arrived the next day, but your mileage may vary depending on the financial institutions involved.

Down to business

While you can manually enter the details of each sale, one of Square's strengths is its free Point of Sale system which lets you create an inventory list – complete with product photos, prices, categories, sizes and stock codes. While this can be a cumbersome task, you can also import this data from a spreadsheet.

Along with taking people's money, Square lets you track your business performance as well as connect to a range of e-commerce and accounting platforms. Even if you don't need this kind of integration today, it's nice to know that it's there when you're ready to take your business to the next level.

While it sounds complicated, Square is very easy to use. Once you've selected a product or entered an amount in the smartphone app, you simply invite your customer to swipe their card over the reader, with the option to split bills. You can then text or email them a receipt, or send receipts to a Bluetooth printer, plus you can save the details of regular customers and even run a rewards program.

The only real downside with the Square reader is that you can't accept contactless or PIN payments unless you have a mobile broadband or Wi-Fi signal. That's unlikely to be a problem for most people, but it's worth keeping in mind if you do business on the road and tend to run into coverage blackspots.