Do you suddenly feel like your bill with Square has gone up? Well there is a good reason for it: a major change to its pricing structure! Square has historically offered a flat rate of 2.75% to all of clients for credit card processing, no matter the card type or transaction amount. However, in an e-mail sent to clients on September 25th, 2019, Square announced a major change to its pricing model. Starting November 1, 2019 Square began charging all clients 2.6% plus a $0.10 transaction fee.
What does Square’s pricing update mean for your business?
At first glance, this change might not seem too concerning. After all, it’s just $0.10, right? Let's break it down and see how this could be impacting your bottom dollar.
If you own a smoothie shop and you sell a $5 smoothie, on the old pricing you would have paid Square $0.14. On the NEW pricing model, you are now paying them $0.23. That is almost a 67% increase! If you sell 100 smoothies per day, that’s an additional $9 in fees per day, roughly $270 per month, or $3,240 per YEAR.
This price change is now costing you an additional $3,240 per year—which is a huge amount for small businesses. In fact, in order for this rate change to NOT impact your business, your average ticket would have to be $66.67 or higher. Businesses with low average tickets, like a deli, bar, coffeeshop, or small retailer, will be impacted most dramatically.
Business owners have often been drawn to Square because of the simplicity it delivers; however, it is clear that putting in a little extra work to research processing companies could pay off for you BIG TIME!
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