It was too good to be true for too long. Square, one of the first companies that turned smartphones into credit card processors 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.
According to the Wall Street Journal, Square said customer feedback claimed that flat monthly fees inhibited growth. Although you could argue that, mathematically, limiting sales to avoid additional processing costs might make sense, depending on your business volume and margins, it’s hard to imagine any entrepreneur passing on growth to game credit card fees.
Luckily, there are other choices. Companies like Central Payment habitually beat Square’s fees, even before the rate increase. Offering everything from business financing, gift card programs, sophisticated (or simple) equipment and excellent customer service, its easy to see why businesses would make the switch. Best of all, Central Payment has real life, local people who answer your calls and talk with you about the best options for your company.
Call today for a no hassle, cost (and commitment free) analysis of your statement from Square (or anyone else!) 850-596-5184