Square, a popular Point of Sales provider and merchant processor, announced last week that their standard rates would change from 2.75% to 2.6% + $.10 on November 1. This rate change will have a big impact on over 2 million merchants nationwide that use Square to collect the majority of their revenue.
On the surface, this change might sound like a positive one because the discount rate on sales volume is shrinking by .15%. However, a lot of Square’s merchants are in the retail or restaurant industries and have a low average transaction total. This means that the addition of a transaction fee of $.10 is much more significant than the decrease in discount rate.
For example, if a merchant’s average transaction size is $15, they would be paying $.41 per transaction under the old plan. Under the new plan, the same merchant would pay $.49. That’s a cost increase of almost 20% with Square’s rate change. If that average transaction size is $5, as is the case with many coffee shops, the increase in fees is just shy of 67%. This isn’t just a marginal change, but a major detriment to many businesses.
Do you want to take back control and undo this steep cost to your business? Fill out the form below and one of our payment industry experts will be in touch to give you an estimate of how much we can save you with our merchant processing expense reduction services while keeping you with Square.