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?
Example 1: Coffee Shop with a $10 Average Sale
Previous pricing:
- $10 × 2.75% = $0.28 in fees per transaction (rounded)
New pricing:
- $10 × 2.6% = $0.26
- plus $0.10 transaction fee
- Total: $0.36 per sale
That’s an $0.08 increase per transaction.
If this shop runs 1,000 transactions per month ($10,000 in sales), that extra eight cents adds up to $80 more per month, a 31% increase in monthly processing costs from this small pricing change.
Example 2: Business with a $25 Average Sale
Previous pricing:
- $25 × 2.75% = $0.69 (rounded)
New pricing:
- $25 × 2.6% = $0.65
- plus $0.10
- Total: $0.75 per sale
This is a $0.06 increase per transaction.
If the business processes $10,000 per month (about 400 transactions), that’s an extra $24 per month or $288 per year, even at a higher ticket size.
What Should Small Business Owners Do Now?
For many small businesses, these increases add up quickly. Now is a great time for Square users to:
- Review their current processing fees
- Compare alternative pricing structures
- Explore whether lower-cost or interchange-plus options could reduce monthly expenses
Even small adjustments in average ticket size or fee structure can make a meaningful difference over a year.
