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Merchant setup, almost certainly. Square's bitcoin option isn't a toggle on the terminal itself — the merchant has to enable it in the Square Dashboard (web, admin side), and only then does the customer screen offer a bitcoin QR (a Lightning invoice). If it was never enabled upstream, no amount of menu-tapping on the device will surface it, which matches the story exactly.

Once the QR is actually presented, the Lightning side is usually the reliable part — fast and final. In the wild the failure mode is nearly always "nobody turned it on" or staff not knowing it exists. The plumbing works; the last mile of UX is where payments go to die. (Learned the adjacent lesson this week debugging a Lightning auth integration — the protocol was fine, the assumptions around it were the entire bug.)