No fee credit card processing

[johnmendes]

What are the advantages Square offers as opposed to the new systems out which offer no processing fees?

[ryanwanner · Accepted solution]

Hello @johnmendes 

Firstly, let me say that when it comes to credit cards, nothing is free. Visa, MC, Amex, Discover all want a piece of the swipe pie, which is usually around 1.1% of the swipe. Sometimes more depending on the card, of course.

If you have found a deal where the company offers free cc processing, I highly highly recommend reading all the fine print and look for these pitfalls?

-What is the monthly fee to access their services?

-Is there a batch settlement fee?

-Are you locked into a contract for waaaaaay too many years?

-What does the fee structure look like in six months? a year?

-Once the fees kick in (and they will), what cards are charged what rates? (All those credit card commercials that talk about rewards points: who do you think pays those? Hint: it's not the cc companies)

-What additional services does the company offer? Free Point of Sale? Free Online webstore? Access to capital? Payroll? Loyalty? Marketing? Customer Database? Instant Deposits? Debit card linked to your account? If they do, how much will that cost ya?

Look, credit card processors are everywhere, and from the overall tone of your question I'm assuming you're shopping for the best deal. I can't blame you for that. What I can say is this: after almost 30 years in the industry, I can say that Square is the most transparent when it comes to fees--what you see is what you get. Many, many other processors won't be that nice to you.

Hope this helps!

[whatzup69]

Is their a way the CC can be charged back to the customer and not charged to the merchant.

[Candlestore]

My accountant has a charge called "Credit Card Convenience Fee"  This fee is a 3% fee for using a credit card instead of cash.  The other way to do it since I believe legally you can not set  a different price for a credit card sale over a cash is to give a 2.5% or 3% discount for Cash sales after raising your prices by 3%.

For some reason your not allowed to charge more for a credit card sale but can give cash discounts.  This is what some of the FREE credit card processors are doing is basically having you put signs out that you give a CASH discount. Which only charges the CC uses the additional 3%. 

Hope this helps 

[Frida]

Hello @whatzup69,

Good to see you posting in the Seller Community again, welcome back! 😊

With regards to Surcharges/service charges, there are a few important things to keep in mind:

Processing fees are taken out of the total amount of each transaction, including tax, tips, and any surcharges.

The following is an example of a swiped $100.00 payment with an added surcharge.

Let’s say you added a surcharge of $2.70 to account for Square’s swiped card fee: $100 + 2.60 + 0.10 = $102.70

• If you charge your customer a total $102.70, Square’s fee will be applied to the total payment: $102.70 x .026 + 0.10 = $2.77

• To determine the transfer you’ll receive for this payment, subtract the fee from the total payment amount: $102.70 – $2.77 = $99.93

• Following this example, $99.93 will be transferred to your linked bank account.

While we can't provide specific guidance  in regards to calculating surcharge amounts, there are third-party calculators available through your app store.  

Another thing to keep in mind, is that debit card surcharge rules may vary by state, regulatory, or card network rules. We do encourage you to touch base with a tax professional or your local government for further guidance on whether surcharges are permitted in your area.

Just remember, that It is the business owner's responsibility to meet all legal and card network requirements and notifying both the card networks is a must.

I have attached this guide related to service charges from our Support Center.

I hope this gives you a starting point, looking forward to reaching your thoughts and reply. 😊 

[jtay8288]

My question is,  can I use Square just for credit card processing & keep my current POS.  We have a dealer system. Trying to find something with out all these hidden fees Merchant Systems has (current cc processor)

[ryanwanner]

Hello @jtay8288 

I can't speak for how Merchant Systems operates, but the general answer to your question is yes. You can set square up on a separate tablet and just type in the total bill amount. I used to do this when I used the Ambur point of sale when I first made the switch to tablet-based point of sale systems. (For the record, Ambur didn't last long once I found out what all Square had/has to offer)

Keep an eye on your contract with Merchant Systems though: they make their money off of credit card processing. It may violate your contract to use their systems but not the cc processing. Again, I'm not familiar with how they operate.