On September 25, 2019, the merchant services company Square announced new pricing for their customers to take effect November 1. In the email, Square noted that their flat 2.75% pricing for tapped, dipped, and swiped transactions would now be changing.
Companies with small tickets, which are a large majority of Square merchants are going to be hit hardest by this price change. The new pricing will be changing to 2.6% + 10¢ per transaction.
How Square’s New Pricing Works
Square has commonly been chosen by businesses that run transactions at less than $15, such as coffee shops, quick serve restaurants, and farmer’s market vendors. The flat pricing generally meant that their processing rates were lower.
For instance, on a $5 transaction at 2.75%, the business would be paying Square $0.13. Under the new pricing model, a $5 transaction will cost $0.23.
While 10 cents doesn’t sound like a huge jump, let’s use an example to look at the cost over time:
Old Square Plan
$5 transaction x 2.75% fee x 100 transactions per day x 365 days = $5,001 per year
New Square Plan
$5 transaction x (2.6% + 10¢ fee) x 100 transactions per day x 365 days = $8,395 per year
Switch to EBS
$5 transaction x 2.69% x 100 transactions per day x 365 days = $4,891 per year
With EBS pricing, that’s a 72% savings in fees!
As you can see, you will be paying more per transaction until you have average ticket sizes of $75 and above. For card present businesses like restaurants, nail salons, and convenience stores, these fees will add up quickly.
You don’t have to be susceptible to Square’s price hikes on your business. Get a free card reader from EBS with 2.69% flat rate and no extra fees! We save the average Square merchant $85 per month! Have questions? Give us a call (209) 600-3453 or request more info below.
Paul Adams is the founder of Evident Business Solutions, a technology company in Northern California that specializes in the hospitality industry. We specialize in point of sale, merchant services, online ordering, branding, web design and would love to help you with your business.