A Change to our Tap, Dip, and Swipe Rate

[Caty]

Hi Seller Community,

Caty here, writing with an important update on Square’s standard card present processing rate (e.g.: swipe/ dip/ tap transactions.)

This morning we began notifying existing sellers that we’ve changed the standard 2.75% processing rate for tapped, dipped, and swiped transactions to 2.6% + 10¢ per card present transaction. For existing sellers — which many of you are — this change will come into effect on November 1, 2019. 

This rate change does not affect the existing processing rate for card not present (manually keyed-in-payments), Card on File/ Virtual Terminal payments, payments taken with Square Register or Square Terminal, payments taken with Square for Retail or Square for Restaurants, or any customers under an existing custom pricing agreement. Additionally, all sellers will still enjoy the following benefits: 

• One rate for all major cards
• No startup fees, statement fees, refund fees, PCI-compliance fees, chargeback fees, or business card fees
• End-to-end encrypted payments
• 24/7 fraud prevention
• Payment dispute management
• Fast deposits, and real-time access to your funds with Square Card

Why are we making this change?

Since our inception we’ve been committed to building accessible, easy to use tools designed to help sellers of all sizes start and grow their businesses. Like any company, we regularly review the market forces and revisit our decisions to ensure we’re best positioned going forward.

The payments landscape has changed significantly since we were first founded, and the flat 2.75% rate simply doesn’t cover all the costs that it used to. Square pays a combination of fixed and variable fees to both banks and card networks on each payment we process. Adding the 10¢ fee helps offset these costs, and is also what enabled us to reduce the variable rate to 2.6% per card-present transaction.

How might this impact you?

As mentioned, this rate change impacts anyone who is currently using our standard, 2.75% processing rate when accepting card present transactions through Square Point of Sale. No other rates are changing, including those currently using custom pricing, or paying 2.6% + 10¢ for card present transactions (e.g.: Square Register or Square Terminal.)

If you’re using the standard 2.75%, our team has worked hard to build a detailed calculator that estimates the differences in fees you might pay based on last year’s card present payment history. Keep in mind, this tool uses historical sales data to estimate what your fees might look like under the new, card-present processing rate. Your actual fees may vary depending on a variety of factors, including: ticket size, number of transactions processed, seasonality, and any growth your business may experience in the future.

Please log into Dashboard to check it out, and don’t forget to read our Pricing FAQ as well.

Final Thoughts

For some sellers, this change will be welcomed. For others, we know it will take more getting used to. We worked diligently to ensure we were able to make the best decision possible for all involved. If you choose to comment on this thread to express your feedback, please keep our Community Guidelines in mind. 

On behalf of all of us at Square, we deeply and sincerely appreciate the opportunity to help you run your business, and we look forward to working with you to grow into the future.

With gratitude,

Caty

Global Head of Scalable Customer Success

Square

[#2]

Hi Seller Community,

Caty here, writing with an important update on Square’s standard card present processing rate (e.g.: swipe/ dip/ tap transactions.)

This morning we began notifying existing sellers that we’ve changed the standard 2.75% processing rate for tapped, dipped, and swiped transactions to 2.6% + 10¢ per card present transaction. For existing sellers — which many of you are — this change will come into effect on November 1, 2019. 

This rate change does not affect the existing processing rate for card not present (manually keyed-in-payments), Card on File/ Virtual Terminal payments, payments taken with Square Register or Square Terminal, payments taken with Square for Retail or Square for Restaurants, or any customers under an existing custom pricing agreement. Additionally, all sellers will still enjoy the following benefits: 

• One rate for all major cards
• No startup fees, statement fees, refund fees, PCI-compliance fees, chargeback fees, or business card fees
• End-to-end encrypted payments
• 24/7 fraud prevention
• Payment dispute management
• Fast deposits, and real-time access to your funds with Square Card

Why are we making this change?

Since our inception we’ve been committed to building accessible, easy to use tools designed to help sellers of all sizes start and grow their businesses. Like any company, we regularly review the market forces and revisit our decisions to ensure we’re best positioned going forward.

The payments landscape has changed significantly since we were first founded, and the flat 2.75% rate simply doesn’t cover all the costs that it used to. Square pays a combination of fixed and variable fees to both banks and card networks on each payment we process. Adding the 10¢ fee helps offset these costs, and is also what enabled us to reduce the variable rate to 2.6% per card-present transaction.

How might this impact you?

As mentioned, this rate change impacts anyone who is currently using our standard, 2.75% processing rate when accepting card present transactions through Square Point of Sale. No other rates are changing, including those currently using custom pricing, or paying 2.6% + 10¢ for card present transactions (e.g.: Square Register or Square Terminal.)

If you’re using the standard 2.75%, our team has worked hard to build a detailed calculator that estimates the differences in fees you might pay based on last year’s card present payment history. Keep in mind, this tool uses historical sales data to estimate what your fees might look like under the new, card-present processing rate. Your actual fees may vary depending on a variety of factors, including: ticket size, number of transactions processed, seasonality, and any growth your business may experience in the future.

Please log into Dashboard to check it out, and don’t forget to read our Pricing FAQ as well.

Final Thoughts

For some sellers, this change will be welcomed. For others, we know it will take more getting used to. We worked diligently to ensure we were able to make the best decision possible for all involved. If you choose to comment on this thread to express your feedback, please keep our Community Guidelines in mind. 

On behalf of all of us at Square, we deeply and sincerely appreciate the opportunity to help you run your business, and we look forward to working with you to grow into the future.

With gratitude,

Caty

Global Head of Scalable Customer Success

Square

[DaoDeJing]

The break-even point for this change is a transaction value of $66.67. (That is, the closer your average transaction value is to this number the less of an effect the change will have on you, and if you exceed this amount the change will actually cost you less.) Unfortunately, the vast majority of Square's customers have nowhere near that high of an average transaction cost. This is a significant change that may seriously disrupt Square's customer base.

I can't berate Square for making this change though; I understand that whether something is good for me personally or not isn't the sole factor in judging whether it's an appropriate change. And Square doesn't have as many other ways to generate revenue as a traditional bank might.

But I will say that I'm not confident the increased rates will go to a good cause. I've been using Square for almost 3 years, all that time waiting for many fundamental functions to be released, yet always frustrated to see nothing but relatively useless fluff features being released instead.

[Lima]

This is clover published rate:

2.3% + 10¢ for in-person transactions

Register $29/month

That means that calling my bank would give me lower rate.

I wouldn't  mind paying Square more if they actually update POS with more function people been asking for years.

[CoffeeShop1]

I have 6 locations with you guys. I'm a local coffee shops and my average transaction is less than $10 majority of the time people only spend $2-$5 this pricing point not only hurt me but increase my fees to 40%+. I'm done with being loyal to you guys. This is insane and pure robbery!

[CoffeeShop1]

Just wait till this news get out to all the small businesses out there. You will be losing a lot of customers before November 1st and the banks will gain a lot of new customers. You're no more different from them now. This is the reason why I don't use you as gift card, payroll or anything else because I know the moment you get a lot of people to sign up you will increase your price. Again, 10 cents is a lot for a coffee shop, ice cream shop, bakery etc. But not a lot for a big restaurant that have average transactions over $20+ So you're deciding against the majority of your customers which is small mom and pop stores.

[RandiJ42]

We are in the exact same position--a local coffee shop with four locations who will be really badly hurt by this. 

[Tommer]

Another small business with small tickets.

This really really hurts!

Just to complete the picture here, any business with an average ticket of $66 (=0.1/0.15%) or less is getting screwed by this change. Our average ticket is about $10, so we get royally screwed. Our fees for selling a cup of coffee is going from 5 cents to 15 cents. Trying to make a living just got harder.

While businesses with an average ticket of more than $66 are going to see lower fees and save money. Thanks.

This structure lets the rich get richer and the little guy/gal pays for it. It penalizes business with many small transactions, which in the square users community, are the smallest businesses.

Why not set a different rate based on size of ticket or monthly revenue caps?

Should we all look for alternatives now?

[CoffeeShop1]

They don’t care about us small guys who made them where they’re right now. I’m pretty sure the majority of their customers based is small transactions. They do this to get the bigger restaurant and businesses out there because their old rate is actually more expensive for people with high avg. transactions. What we all can do is use Square as a cash register only and process CC transactions with a new merchant services. This allows us to still maintain the cash register but give Square the finger.

[chstewart101]

Can you change processors but keep all other square backend the same? How?

[cmusicshop]

Having higher tickets doesn't equate to ''rich'' @Tommer 

I'm one of the 'lucky' ones that this rate change barely affects.  Most of my sales are below the $66 threshold but I do sell things in the $100's and even $1000's.  All together I'll see a whopping $1 or two extra per month.  Each small sale will cost me more now but I get to average that against the larger ones.

That being said - I am concerned that Square is raising rates for most and that so many features are incomplete, missing or just not as good as they could be. 

[chstewart101]

This is crazy! This is a 46% increase in our Fees per month. Going to be looking for other options immediately!  VERY disappointing square. We were recommending your system to our entire Franchise network, but will be reconsidering. 

[JennyEvenKeel]

Why isn’t this scalable to the size of the business or by how many transactions a business might have? While clearly larger businesses with less transactions won’t notice anything, my small coffee business that has multiple transactions a day will. This dramatically impacts our overall bottom line, not to mention the hundreds of dollars in fees we are already paying for transactions, loyalty, employee management, marketing, payroll, etc. Please consider how small businesses with a large amount of SMALL transactions are impacted. It’s going to be extremely impactful to the point of having to look for another system (which is unfortunate in itself, because we love Square overall).

[Donith]

If this change occurs, I'll also be taking my business elsewhere. This is an effective increase from 2.75% to 3.6% based upon my average transaction amount. This is unacceptable and with the amount of POS & merchant processing companies, I don't perceive any issues finding a cheaper alternative.

[pessosices]

As much as we all hate price increases, I do understand. As a small business owner, I hate raising my prices, but I need to do it to stay in business as our expenses increase. I get that Square as a huge company with even more expenses and moving parts needs to do it too. 

I may have to raise my prices a little bit to compensate for the difference, just as I do when my other expenses increase, but it's worth it for all of the benefits that Square offers my business over other companies. And hopefully I'll qualify for a Custom Rate soon and end up saving money even over the old rate.

[dongillis]

This is a 78.8% increase for me and brings my effective rate up to 4.9% from 2.75%. This is basically a big middle finger to all of the coffee, bakery, small transactions businesses that helped make the square brand visible. Time to find a different processor.

[Mjeans]

I received your notice of fee changes today: Wednesday, September 25, 2019. The email tries to play off the change as inconsequential and somewhat flippantly states that my fee increase will be just $6.52 per month. What you don’t take into account is: that equates to a 7-19% increase in charges for me over the last year, or an average of a 14% increase!

The reason that I chose Square in the first place was precisely because there was no ten- or fifteen-cent charge per transaction. The 2.75% base rate is easy to understand and is helpful to a company whose average product sells for $4.00. Flat charges per transaction make selling products that are $2.75-6.00 nearly impossible unless we put up those stupid (and frankly, illegal) signs that read “No charges under $5” – or in this case, “No charges under $64”! The fees per transaction with your new system don’t equal out until my transaction total is over $60!!

If you truly need to raise the pricing, a much better system would be to raise your transaction rate to 2.8% - then your change would affect all companies equally, and not create such an inordinate price increase for smaller businesses or businesses with smaller fees. Your decision is inequitable and discriminates against the small businesses that chose your product specifically because it doesn’t have a per transaction fee.

I am incredibly disappointed with your decision to make this change.

Forget being innovative or the champion of small business – now you’re just like every other credit card processing company. What a terrible way for you to treat the thousands of small businesses that put their trust and dollars in your system.

With much dissatisfaction,

Mackenzie Jeans

[HeatherSweetD]

I'm with you 100%.  It no longer makes sense to use Square.  My company began using square early on and it's heartbreaking that they would just surprise us with this type of increase.  There has to be a tiered scale pricing system or this is going to hurt them.  Unless, of course, their intentions are to shake out small businesses in favor of businesses with a higher per transaction average.  

[chstewart101]

14% is bad, We calculate out to over 40% increase. Crazy!

[suescandyllc]

This is ridiculous! We just changed over to Square a couple months ago because a percentage only fee was great for small tickets. Now that we've gone through all the trouble of moving over, I find out this morning that we're going to be paying significantly more than we were told? This is unacceptable. 

[kristylam59]

can you send me a message? I would like to talk to you too.

[HeatherSweetD]

Don't waste your time.  They are only going to tell you how sorry they will be to see you go.

[kristylam59]

you are right, obvious they don't care.