As of September 24th,2019 Square announced that they are no longer going to be offering their customers a flat rate of 2.75%. Their new pricing is going to be 2.6% plus $.10 per transaction.
How will this affect their customers?
A business like a coffee shop with a $10 average sale currently pays the following fees:
$10 x 2.75% = $.275 ( or $.28 if you want to round up) in fees on every sale).
Under the new pricing they will pay the following:
$10 X 2.6% = $.26 PLUS a $.10 transaction fee = $.36 in fees.
This $,08 might not sound like a huge difference but it adds up fast. If this coffee shop runs 1000 transactions a month - only $10,000 in sales then they will see an increase to their bill of $80. this is a 31% increase in their monthly fees just from this minor change!
Even a business with a slightly larger average ticket will see costs increase due to this change. Below is an example of a business running $25 average sales with Square:
2.75% x $25 = $.688 ( $.69 if rounded up)
2.6% X $25 = $.65 PLUS a $.10 transaction fee = $.75
this is a $.06 transaction increase. it might not sound like a lot but it can add up fast for a small business. If they run $10,000 a month those 400 transactions will cost them an extra $24 per month or $288 a year.
This is a great time for those small business owners currently using Square to review their pricing and see if they have a better option to decrease their costs.