Square And Your Money
Its important to know that Square is not a traditional payment processor. Square is an online payments company, like PayPal, and thus does not offer the same services and support you get with a full-featured payment processor. When you sign up with Square you do not create a conventional merchant account, you simply gain the ability to have Square handle your credit and debit card payments for you.
This is reflected in the sign-up process. Square does not require an extensive credit history or account review before it approves a new account, as a traditional payment processor does. Payment processors require this type of background check to protect themselves against fraud they simply wont sign up shady businesses. Square, on the other hand, does not have these protections and is more apt to freeze a companys funds or place an account on hold if something unusual pops up.
Many businesses have found that Square limits the amount they accept per transaction, or place 30-day holds on certain types or sizes of transactions. Square has also been known to suspend accounts with too many transactions or transactions of too high a dollar value. In fact, Squares Seller Agreement states:
We may terminate this Agreement or suspend or close your Square Account for any reason or no reason at any time upon notice to you.
Where Can I See My Free Processing Credit
If youve referred, or have been referred by another business to use Square, youll see fee reimbursements reflected in your transfer summaries.
Visit Balance> Transfer Reports in your online Square Dashboard> select a transfer.
Youll see fees reimbursed in the Free Processing row of the transfer summary.
You can also see how much free processing credits you have left under the Get Free Processing section of your Square Dashboard.
Learn more about Squares referral program.
The Best Credit Card Processing Companies Of 2022
- Best for Large Volumes: Stax by Fattmerchant
- Best for High-Risk Merchants: PaymentCloud
With transparent pricing and volume-based discounts, Helcim helps you scale your business.
CRM and inventory management tools included
Many options to get support
Online approval makes it easy to sign up
Only one plan to choose from
Only one type of hardware
Helcim has been in business since 2006, expanding from a payment processor to a financial technology company offering various business solutions. With no monthly fees and a fee schedule that rewards you for higher volumes, Helcim is a great choice with plenty of options for small business owners, which is why its our best overall winner.
The company is a Level 1 PCI-DSS compliant service provider that uses top-notch security practices typical with financial technology companies.
Business owners use Helcim to accept payments like:
- Pin debit cards
It takes about five minutes to sign up for a Helcim account, and you dont need any hardware to get started. Simply download the payments app to start accepting payments. For in-store transactions, order the Helcim Card Reader for $109, which connects with smartphones, desktops, or tablets.
While Helcim integrates with QuickBooks and WooCommerce, the real benefits come from its extra services. You can turn any device into a workhorse using cloud programs from Helcim, including:
- Point of sale system
- Customer management
- Inventory management
- Payments app
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Square Fees: What Are The Costs
Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list ofour partnersandhere’s how we make money.
Square costs fall into one of three categories: per-use fees for payment processing, a monthly subscription cost for software and the price of any Square hardware you buy.
The basic Square point-of-sale app is free to use. Youll only pay the standard transaction fee of 2.6% plus 10 cents for each in-person card payment. If you want to move beyond basic software features, or if you want hardware to make it easier to accept payments, additional costs apply.
When Will My Money Be Transferred
You can choose to receive your funds through one of our three transfer options. By default, your sales are transferred within 1-2 business days using our next business day transfer schedule. If you need access to your funds faster, you can use instant transfers or same-day transfer to immediately send your funds to your bank account.
With Square Card, you can take a payment and the money you earn is reflected in your balance. You can spend that money with your Square Card anywhere that Mastercard debit cards are accepted.
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How Do I Set Up Square For Restaurants On Square Register
Setup on Register is simple, and this support article explains everything you need to know. Note that youll need to update your software to the latest version and create a device code on your Square Dashboard before signing in and following the onscreen instructions. Reminder: Register is available with the Free Restaurants plan .
Paypal: Who Do We Recommend It For
PayPal is known as one of the best online payment platforms available. It offers excellent online with no monthly charges, and it’s a great choice for retailers that need to begin accepting online payments immediately.
Even though PayPal doesn’t offer as many POS or hardware solutions as Square, you can jump into PayPal and start accepting online payments in just a few minutes using PayPal’s credit card reader. The company also continues to expand its accepted payments to include cryptocurrencies such as Bitcoin, Litecoin and Ethereum.
Unfortunately, PayPal charges for certain items that you’d receive for free from Square like a virtual terminal and chargeback fees. You’ll also need to keep an eye out for extra paid services, like fraud monitoring and recurring payments.
Here are PayPal’s most important features:
- Free POS mobile app
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Swiper & Compatible Devices
One of the benefits of Squares service is that its completely free to get started. Squares application runs on a users existing iPhone, iPad or Android device, and there is no charge for the magnetic stripe card reader that plugs into the headphone jack.
Square also offers EMV-capable swipers to allow you to securely accept EMV chip cards. Currently, the EMV reader costs $29. Square also has a combination contactless/EMV reader. The swiper is free to businesses that qualify, or will otherwise cost $49 but include reimbursement of $49 of processing fees.
Square Credit Card Processing Fees
Compared to other payment processing companies, Stripes range of are quite competitive. Their flat rate includes interchange fees and other assessment fees that can quickly add up if customers pay by American Express, unlike other companies. Their pricing breakdown is as follows:
- For swiped, dipped, and tapped card transactions, they charge 2.6% in addition to 10 cents.
- For keyed in transactions, they charge 3.5% in addition to 15 cents.
- For online invoices and e-commerce transactions, they charge 2.9% in addition to 30 cents.
The good news is that Square doesnt charge any point of sale fees, cancellation fees, or PCI compliance fees that can substantially increase costs over time. In addition, businesses that sell over $250,000 per year and have an average ticket size of $15 or more might be able to negotiate with their sales department for a more competitive rate.
For businesses looking to offset processing fees, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 allows them to set a credit card minimum up to $10. This can make smaller transactions more cost-effective in the long-term.
Overall, Squares credit card processing fees are affordable and easy to understand, making them a great option for smaller businesses and more established ones. However, they dont usually work with high risk businesses or merchants dealing with high ticket prices.
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Square Credit Card Processor Fees And Cost
There are different fees for each type of payment, so mainly, the cost varies depending on the payment whether it’s a credit card, debit card, or contactless payment.
Let’s get started with the cost of the in-person payments that are made at the point-of-sale, but before we head to the fees of each transaction, it’s important to know that the type of terminal makes a difference, but in this section, we’ll focus on the general Square point of sale fees. However, the company has three other options: Square for restaurants, Square for Retail, and Square Appointments.
- For in-person payments, the company charges 2.6% + $14.10 for every tapped , dipped , or swiped payment, with fee Square reader for magstripe for the first reader, and $10 for each additional one.
- Square as we said before, accepts payments on the website, by invoice, or over the phone, for these types of payments, the company charges 2.9% + $42.31 for Square invoices card transactions, 3.5% + $21.16 for Square virtual terminal transactions, 2.9% + $42.31 for eCommerce transactions, and 1% with a $1 minimum for ACH bank transactions.
Square Vs Paypal: Pos Comparison
|Read our PayPal Review|
In general, Square is a better option to accept in-person payments while PayPal is a better option for e-commerce and online payments. Both Square and PayPal were rated one of our top ten POS systems in 2021, but Square received a significantly higher score.
One of the biggest differences between these two companies POS systems is that Square offers more business tools, such as employee management, while PayPals features are limited to payment. Square has a feature to schedule appointments within the app so that you can integrate your calendar with your payment platform. Customers can book online and you can send them reminders through the app. The software also enables you to keep client credit cards on file and schedule prepayment before visits.
PayPals transaction fees are listed as lower for card-present transactions2.29% plus $0.09 compared with $2.6% plus $0.10however, PayPal does have more additional fees that are less apparent and harder to account for .
The first card reader Square gives you is free. After that, each additional card reader is $10. With PayPal, card readers cost $29 and $79 for each additional device. Square offers a tip management tool and both companies offer multiple options for software integration.
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Whats Squares Customer Support Like
If you have an issue with your terminal or need assistance, you can reach Square between 6am and 6pm Pacific Time, or send an email anytime. You can also set up a public dialog with the company via Twitter , live chat, or other social media platforms.
Alternatively, you can tap into Squares knowledge base. This is an online library featuring a robust range of articles, guides, tutorials, and video resources to help you fully get to grips with how to make Square work for you. Youll also have access to Squares Seller Community, an online hub where you can connect with fellow SMB owners.
Want to be part of Squares Seller Community? You can be.
How Much Does A Vanity Number Cost
Vanity numbers vary in cost, depending on the following:
- The provider you choose
- The phone plan you need
- The type of number
- The area code you want
With these variables in mind, vanity numbers can be as low as $10 per month or as high as $100 per month. Phone providers often charge initial setup fees for vanity numbers. These fees can range from $15 to $100. Many of the best VoIP services on the market will allow you to set up a vanity number as part of your plan.
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Calculate Your True Processing Rate
Your effective processing rate is your rate after adding up all processing costs, including interchange fees, processor markups, and any monthly service fees you’re paying. It’s the true percentage you’re paying for every credit card transaction.
To calculate your effective processing rate, look at your past monthly statement. You will need two numbers:
- The total processing fee charged
- Total amount of you processed
Then use our calculator to find your true effective processing rate.
Effective Credit Card Processing Rate Calculator x 100
In other words, the effective rate is how much it costs you to process each credit card sale. For example, if it costs you $450 to process $15,000 worth of card sales, then your effective processing rate is 3%. Each dollar you process costs you 3 cents.
Now you have an idea of what exactly you’re paying for each credit card transaction. But what does it mean? Is it good, or high? Let’s see.
- No Cancellation Fees
Lowest Fees: National Processing
This budget-friendly service offers low prices for processing with its no-frills approach.
You may get hit with a early termination fee
No equipment prices on website
ACH/eCheck processing fees arent listed
Established in 2007, National Processing earns good reviews among small to medium business owners for its reliable service and pricing transparency.
With its $10 per month plans, you can process payments with a low fee per transaction, making it a clear winner for the lowest fees.
National Processing is PCI-compliant. The company accepts all primary payment forms, including:
National Processing partners with Clover to provide a full range of Clover equipment, such as:
- Clover Go: Comes free with a contract and works with your phone
- Clover Flex: A portable all-in-one register and printer
- Clover Mini: A small POS system
- Clover Station: A full-size POS system
With no minimum monthly fees, an interchange-plus rate system, and a transparent pricing model, its easy to figure out how much credit card processing will cost. For each plan, youll pay the monthly charge, interchange rate, and transaction fees:
- $9.95 per month Restaurant plan: 0.14% plus $0.07
- $9.95 per month Retail plan: 0.18% plus $0.10
- $9.95 per month e-Commerce plan: 0.29% plus $0.15
- $59 per month Subscription plan: 0% plus $0.09
- $199 per month Subscription Plus plan: 0% plus $0.05
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The Bottom Line: Whats The Best Option For Your Business
The bottom line is that only you know what is best for your business. For most established, high-risk, or traditional businesses, applying for a standard merchant account is typically the way to go, as it offers complete credit card processing services. By establishing your own payment processor relationship through obtaining a merchant account, you can expect custom pricing, tailored payment thresholds based on your business processing habits, more control over your money, and support when you really need it.
How Does A Merchant Account Work
Setting up a merchant account requires time, due to the underwriting process.
When underwriting your merchant account, a payment processor is obligated to do a thorough evaluation. Some of what this evaluation analyzes includes:
- your business history
- processing behavior, including transaction size and volume
- industry and/or personal risks, like if your previous processor blacklisted your business
- personal and business credit scores, as applicable
That said, a new or high-risk business may find it incredibly difficult to establish a merchant account.
Once established, your merchant account becomes, essentially, an agreement of trust between you and your credit card processor. Youll be assigned a merchant ID number that uniquely identifies your account, then your payment processor will set parameters of normal processing behavior. This account then becomes the filter for every payment you accept, managing the cash flow from your customers bank account to your business bank account.
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Average Credit Card Assessment Fees: Around 014%
The assessment fee is the payment network’s cut, and it’s a much smaller portion of each transaction.
American Express is once again the most expensive payment network, but this time around, Discover has the lowest rate, at least for transactions under $1,000. For transactions of $1,000 and over, Mastercard is the clear winner. That being said, the differences in assessment fees between each payment network are minuscule.
How To Lower Processing Rate
If your effective rate is over 3.25%, then you’re most likely paying too much.
If you like your current provider, you can try negotiating with them first. Remember that the interchange rates and assessment fees are not negotiable. BUT you can negotiate anything the provider has control over. This includes:
- The processor’s markup
- Payment gateway / virtual terminal fee
- Equipment fee / setup costs
- PCI compliance fee
Reducing any of these fees will help lower your effective processing rate. Ideally, you want your provider fees to be no more than 20% of your entire processing cost.
The key to negotiating is to be a valuable client. The more sales you have, the more negotiation power you have.
It’s also important to have a good history. This means always making payments on time and having fewer chargebacks. By being a good client, the provider is more likely to work with you to cut down fees.
Here is the general rule of thumb:
- If your business has a small average ticket size, negotiate the fixed fee.
For example, if your processing rate is Interchange + 0.2% + $0.10, getting it down to + 0.2% + $0.05 will save you 5 cents each purchase. That can add up to a lot of savings if you’re processing thousands a month.
Also see our 8 ways to lower credit card processing fees for more practical tips.
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