As Square Cancels Flat Fees For Small Businesses It’s Time To Review Your Other Payment Processing Options
A new version of this post has current information for 2017 and some additional resources.
Editor’s note: Updated post to include EMS, another payment alternative, and to correct information about holds on Square transactions.
It was too good to be true for too long. Square, the innovative start-up that turned smartphones into just killed its flat fees for small companies, effective in February. Instead of charging $275 for up to $21,000 in monthly transactions, the company is moving to a 2.75 percent swipe fee, or 3.5 percent plus $0.15 for each manually entered transaction.
To compare, 2.75 percent of $21,000 is $577.50, which is $302.50 higher than the old monthly fee. If you can swipe all the transactions, then the only way to keep your fees with Square under that $275 number is to process no more than $10,000 in monthly transactions. Not exactly a smart goal for an entrepreneur.
Stax Vs Square Fees Scenario : Card Present
Lets say your business processes $18,000 CP payments per month with four $150 sales purchased using a rewards debit card per day for thirty days. How much could each pricing models credit card processing costs affect you?
As you can see, with per-transaction costs that can go as high as 3.5% + $0.15, you could be paying up 60% more in Square CNP transaction fees per month than if you processed with Stax.
While most of Squares merchant services offerings are very similar to Stax, their additional fees and status as a provider can quickly make them a more expensive and somewhat riskier option over time, especially as your business begins to grow.
*Interchange is set by the card associations like Visa and Mastercard and is a required cost for taking credit cards. The exact interchange rate for each transaction is affected by dozens of factors. Interchange can be less than 1% for certain in-person debit cards and over 2.7% for some keyed-in rewards credit cards. For these examples, we averaged a number of common interchange rates and applied 1.65% for card-present transactions and 2.15% for card-not-present purchases to showcase.
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.
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Only Active Accounts Get Real
Phone support codes are only provided to active Square merchants, meaning that any Square user who has had his or her account deactivated will still be unable to reach the company by phone. It is our position that deactivated merchants are the merchants who have the greatest need for phone support, so this customer support line is only a minor step forward for Square. Business owners who prefer to have access to full-time, in-house support staff are better off choosing a conventional merchant account provider.
How Much Are The Square Fees
While opening an account and starting to process payments is free, there are several Square fees that also come into play as your business starts to need additional options and services.
Square offers a flat rate on each transaction a small business processes regardless of whether its a debit or credit card.
For transactions that are processed using an in-person POS or card reader when a customer has swiped, dipped, or tapped their card they charge 2.6% + $.10 per swipe.
However, this does not account for the rates they offer when using specific Square products as the flat rate will vary based on how you collect your customers payment.
Additionally, Square offers other transaction rate options based on what Square product youre using. For example:
- 2.5% + $0.15 per swiped, dipped, or tapped transaction using a Square Register
- 2.6% + $0.15 per swiped, dipped, or tapped transaction using a Square Terminal
- 2.6% + $0.10 per swiped, dipped, or tapped transaction using Square Appointments
That is not to mention their different rates for certain card-not-present transactions where you need to collect payment by phone, through a website, or virtually through an online invoice. In these cases, the rate can jump up to 3.5% + $0.15 per transaction. These are factors to consider when thinking about fees paid per transfer or transaction.
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Does Square Charge Hidden Fees
One nice thing about Square is that it generally doesnt charge hidden fees. What you see is typically what you get. Visit Squares website, and youll find admirably clear explanations of their rates, the types of technology and services they offer, and the differences between their free and paid options.
Of course, that doesnt mean your total costs when you deal with Square will always be obvious. Squares pay-as-you-go and buy-only-what-you need philosophy is one reason why it provides so many types of equipment and variations on its services, but that wealth of options can also lead to confusion. We recommend carefully examining Squares website before signing up and selecting the equipment and services you prefer. Ultimately, all the details are there, but it will take some digging on your part. The detailed discussion in this review can help.
Stripe: Chargeback Refunds And Payment
Billing will impact businesses, but a simple view of how they are managed is important.
But on the other hand, Stripe imposes a $15.00 reimbursable/ refundable/ chargeback fee for those instances. And, further amazingly speaking, Stripes Stripe Radar feature has credit card fraud security.
This is yet another point to remember when contrasting square vs. stripe, as it can help maximize the companys exchange rate, free from transaction fees and reimbursement.
The collection of payments by Stripe spreads across the stripe card reader. In contrast to ACH, Stripe gives traders the possibility to accept a range of regional payments in multiple locations worldwide. Moreover, you can connect Apple Pay to the website and other digital stripe payment for payment services.
Stripe is accessible in 39 countries and is expanding, endorsing but embracing many more payment types than 135 separate currencies. It accepts big cards like Maestro, Visa, Mastercard, JCB, Diners Club, and American Express cards. Apple Pay, Android Pay, Alipay, Visa Checkout, Visa Pay, AM, Bitcoin, AMPAY, etc. Web-based wallets are also included. Stripe supports transactions of ACH which are not supported by PayPal.
As the worldwide payment environment is highly diverse and fractured, Stripe makes finding and embracing popular payment options with a single integration simple for any company anywhere around the globe.
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Square Credit Card Processor Review
Our team has reviewed Square POS and discussed its reliability and perks for all types of businesses. And after reading a handful of customer reviews and doing our research, we can be confident about Square credit card processor as one of the best providers out there.
Square stars in the field by offering free account maintenance, free PCI compliant system, and a free mobile app that has the full suite of point-of-sale. We still have much to tell you, let’s get right into our review and find out if Square credit card processor is what a business needs to thrive.
In brief, this is what the service has to offer:
Square credit card processor is a full-service solution that is rich with features and advanced solutions. What we also like about the service is the absence of monthly fees. Square’s cost has always been one of its strongest perks, merchants typically pay a flat rate of 2.6%+ $0.10 for swiped or tapped transactions, 2.9%+$0.30 for online transactions, and 3.5%+$0.15 for keyed transactions.
All Square credit card processing solutions are CPI compliance and guarantee payments security. The company offers a free mobile app that is compatible with both Android and Apple, with simple flat-rate and no contracts are required.
Here’s what comes with every account:
- Free Square reader for magstripe
- Free Square point-of-sale app
How Often Do Payment Networks Update Their Interchange Fees
Payment networks generally update their interchange fees on a yearly basis. This doesn’t mean they raise rates every year. As mentioned before, American Express lowered its credit card processing fees in 2018.
Visa and Mastercard have been planning to increase credit card fees for certain types of merchants. They’ve postponed this for two years in a row because of the COVID-19 pandemic. There were reports that both were considering an increase of 0.05% to 0.10% for online transactions. While that didn’t happen this year, it’s a significant change that we could see happen in 2022.
Although it may seem like the card networks benefit the most by raising fees, it’s actually the banks. Remember that interchange fees go to the bank that issues a credit card. The banks that partner with Visa and Mastercard to issue their credit cards are the ones that will collect those additional fees.
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Free Online Ordering Website Builder
Square Online is the third free solution that comes with every Square account. Its a user-friendly site builder that can be used to create a business website or a basic ecommerce site or to add online ordering or order-ahead functionality to your business. You can also use Square Online for online appointment booking.
It includes a range of templates for retail, restaurant, event, appointment, and other business types. It automatically syncs orders, inventory, and customers with your POS and can be used to process curbside pickup, shipping, or local delivery orders.
Read our step-by-step guide to create a free Square Online store in just a few minutes.
In the News:
In August 2021, Square entered into an agreement to purchase Afterpay. Afterpay is a popular buy-now-pay-later platform that allows consumers to purchase items in six interest-free payments . Square plans to add this to its Cash App to expand purchasing services further.
Fees For Square Reader And Square Stand
Square used to offer a very competitively priced magnetic stripe card reader, but following the switch to chip cards in the U.S., users are encouraged to purchase the new chip card reader at a still-low cost of only $49. The company offers a single processing fee option for all merchants using Square Reader or Square Stand, its two flagship pieces of hardware: a flat rate of 2.60% plus $0.10 for swiped transactions and 3.5% + $0.15 for keyed-in transactions. Alternatively, the company provides other rates for merchants from businesses in different industries. Square for Restaurants rate is also 2.60% plus $0.10 while Square for Retail charges 2.5% plus $0.10. Invoice payments are processed at a rate of 2.75%. The company allows merchants to deposit into their bank accounts on the next day for free or instantly for 1% of the amount being transferred.
Square formerly offered a plan that included a flat monthly fee of $275 and 0% on swiped transactions up to $250,000 in processing per year, but this plan was discontinued as of February 2014.
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Should You Use Square
Well get into more details on Squares specific products below. But, generally, for any small business processing less than $120,000 per year, Square is the best POS and payment processing solution because it comes with no fixed monthly costs and offers an incredible value with the free POS system. Visit Square to create your free account.
Dharma Credit Card Processing Fees
Dharma is a popular merchant account provider that uses an interchange plus pricing model. On top of the per-transaction fees shown below, they charge a small $10 monthly fee. Businesses that process more than $100,000 in credit card payments per month can earn a discount. Dharma also provides discounted pricing for restaurants because food service businesses rely so heavily on affordable credit card processing.
Dharma is a small business-friendly optionâthere are no long-term contracts or monthly minimums required. The company also provides an app called MX Payments, which allows you to easily run reports, accept online and phone payments, and store customer credit card information. Thereâs no credit card terminal that comes with Dharma Merchant Services, but they recommend Clover POS.
Open a Clover Account
|0.3% + $0.20 above Interchange|
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Dedicated Solutions For Many Business Types
Nearly every type of merchant can use Square. In addition to mobile merchants that ring up sales and services on the go, online businesses and those with physical locations can use Square. It has dedicated solutions for different industries and business types, such as retail, food and beverage, service providers , health and fitness, organizations, and entertainment. However, before signing up with Square, you’ll want to check its list of prohibited goods and services to make sure it supports your business type. If it doesn’t and you sign up anyway, the company may freeze your funds and cancel your account without notice.
Squares Policies On Holding Your Money
Until November 2013, Square placed holds on funds of card-not-present sales for 30 days if more than $2,002 was charged within any rolling seven-day period. This meant that if a merchant keyed in $2,100 in sales within a seven-day period , the extra $98 would be held by Square for 30 days. This policy generated a lot of confusion among users because Square did not provide any warning before the $2,002 limit was reached. Square now claims that merchants can process transactions of any type and any size without having to worry about a processing limit, but this claim is not entirely accurate.
Related: How to Stop Square From Holding Your Money
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Square Terminal Costs And Fees
Merchants can buy Square Terminal outright for $399 or pay 12 monthly installments of $37. Square also offers a $300 statement credit for new Square users, which is intended to bring the effective cost of the terminal down to $99. Transactions processed through Square Terminal are cheaper than normal Square transactions but more expensive than Square Register transactions, coming in at 2.6% plus $0.10. Manually entered credit card payments will be charged Squares keyed-in rate of 3.5% plus $0.15.
How To Use Square Mobile Payments
Square in-person payments: 2.6% + 10 cents for every tapped, dipped, and swiped paymentCard-not-present transactions: 3.5% + 15 cents when you enter a credit card number manually in the Square Point of Sale app
To use Square mobile payments, youll need to download and sign into the mobile POS app on your iOS or Android device. Once youre logged in, hit the Checkout button on the left side of your screen to log your sale. You can manually enter the transaction amount or select items from your Library if youve set up your inventory.
When processing payments, either type in an amount or choose a pre-set item from your product library to automatically tally the purchase total.
When youre ready to accept payment, hit the Charge button. You can process payments in several ways.
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Stripe Vs Square: Which Is Ultimate For Your Small Business
Among the most significant developments in the financial sector is potentially that of payment processing gates. They are also increasingly changing, guided by growing web user dynamics, and effective firms that have changed to keep them competitive. It isnt easy to choose the correct payment processor multiple solutions exist, and many have identical functionality. Stripe and Square the top performers in the game, are two of the most important players you might think from in time. But Stripe payment and Square payments are drastically different in various main areas considering their part in strengthening safe Online Transactions between companies and consumers.
Major listed companies such as Target, Lyft, Amazon, and Spotify are among Stripes clients. However, several other firms, such as Ben & Jerrys AAA, and Eventbrite, are using Square.
All businesses accept credit card and internet purchases in person. So, what are you to really choose your company? Is it more comfortable to use Stripe or Square? What characteristics make them distinct, and which one is best for your business?
This article contrasts square vs stripe with some of the main requirements to keep you up-to-date with the market and appreciate which payment door is the best fit for your consumers and company needs! Read on to learn more.
Squares Payment Processing Fees
|We’ve put together a great resource to educate sellers about Our Fees.|
Note: If youre unable to download the Square app after updating your devices operating system, your device may not be supported. Learn more about devices supported with Square. If youre pivoting your business to online commerce, check out the Square Online.
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Merchant Account Provider Credit Card Processing Fees
Merchant account providers are traditional credit card processors that have a more complicated, variable pricing structure for transaction fees. Although it is more complicated, merchant account providers provide the best deal on pricing, particularly for businesses that process a high volume of credit card payments. Of all the pricing models we discussed earlier, small businesses should probably avoid tiered pricing when it comes to merchant account providers and opt for a provider that uses the interchange plus pricing model.