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08-17-2012, 03:48 AM #1
Square Introduces a Flat Rate Plan That May Appeal to Small Businesses
If you run a business that utilizes Square for taking payments, you might be in luck. Square recently introduced a new monthly flat rate plan for their mobile payment service. For $275 per month, businesses can sign up for unlimited transactions without having to pay 2.75% per transaction. Now, for those of you who utilize Square and think this might be a good idea, it might be important to note that it only pays off if you pass more than $120,000 in Square transactions every year. This make’s Square’s new unlimited plan very attractive for successful small businesses. For those individuals who take occasional payments via Square, this is obviously not worth it for you.
For those of you who didn’t already know, Square is a mobile payment service that allows Android and iOS users to accept credit and debit card payments with their smartphone. Users can either type in their client’s credit card number to complete a transaction or they can use the free Square Reader which plugs into the user’s phone, tablet, or iPod Touch via the headphone jack. For those of you who might be interested in acquiring a Square Reader, you can do so by signing up for a Square account and requesting a free reader. Once you obtain the reader, you can download the Square App to your mobile device and start accepting payments.
This change should help increase the popularity of Square further as the service continues to expand. Most recently, Square signed a deal with Starbucks so consumers should be able to pay at Starbucks via Square. This goes to show that mobile payments are going mainstream and are expected to be a vital part of business transactions in the future.
Source: Square via The Verge
08-17-2012, 11:59 AM #2
Maybe I'm missing something here, as I haven't gotten to the point of accepting credit-card transactions yet in my line of work, so I'm rather unfamiliar of what's normal as far as rates usually go for that sort of thing, but $275 a month, just for processing credit-card transactions seems rather steep to me. Is there any reason why this is so expensive? As this is something that's purely handles electronically (by computers), wouldn't the actual cost of electricity and Internet used, for those a few seconds it takes to process, amount to only a few dollars at the most? The only thing I can think of is something I seem to recall having read a while back about credit-card companies themselves charging a lot on their end for swipe terminals in stores and such, although I'm not sure this is true, and also not sure why it would also apply to something like Square? Thanks.
08-17-2012, 12:26 PM #3
Processing credit card transactions is incredibly expensive for small business owners, and companies in general. Normally a small business has to pay a rental fee for equipment on top of transaction fees to every credit card company they accept (VISA, Master Card, American Express, Discover). Being able to pay a flat rate, and not pay for equipment would be absolutely game changing for small cafes, restaurants, boutiques and corner stores where purchases sometimes are so cheap it cost more to process the transaction that the transaction itself.
Think about it, that's why so many gas stations have minimum purchase limits. Before last year banks could set their own debit card fees which were something insane like 40 cents or more per transaction. Recent legislation capped that fee at 12 cents.
08-17-2012, 06:38 PM #4
08-17-2012, 10:14 PM #5
It might not sound like a lot, but if you figure an average bill of $500 would cost me $19.05 just for that customer to use a credit card.
With Square, it's 2.75% which is $13.75 for the same $500 transaction.
$5.30 adds up pretty quick, especially when the cost is coming out of my pocket.
I won't be using the capped offer, as I process nowhere near $120k a year.... But it's good for larger companies!The early bird may get the worm, but the second mouse gets the cheese!
08-18-2012, 04:34 PM #6
hmmmmm, easy money.....
get credit card with rewards......
charge myself over 250,000 dollars or more on set plan.
use rewards.... free money!
08-19-2012, 05:52 PM #7
That's is very high for that volume. Could get it cheaper from a bank like chase or boa.War is my mission. Killing is my ambition.