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

[bobalove]

I would like to speak to a Square Representative as well.

This is going to hit our business so hard, that we feel like we will have no other choice but to take our business elsewhere. It's disappointing because we just signed up for their Loyalty Program a few months ago, and had plans on signing up for their Marketing Program as well. We just wanted to wait until most of our customers were signed up for our Loyalty Program before we signed up for marketing.

[mmikeb32]

This is an obscene rate change.  This is going to increase our costs by over 30% and around $10,000 a year.  This will hurt our business and hurt our employees.  This is not a cost we can absorb.   Sadly we have been a customer for about a decade and have been happy with the changes we have seen.  Initially the customer service was sadly lacking but we put up with it because we had faith changes would occur.  As time passed, things got better and we have been happy with the evolution.  But these fee increases are absurd and are not sustainable with our business.  Especially in one month.  I imagine Square is hoping a lot of customers will not look into this and realize how ridiculous this is.

[Monty360]

Another coffee shop owner here who's rates just jumped up 40%...come on Square! Small business owners with high volume but low average checks, moved to square as an alternative to big POS systems and inturn built your company. Now we get the shaft, I've been Square loyal for the last 4 years. I will unfortunately need to take my business to another provider. 

[hscva]

This change will cost my business around $5000 annually which greatly hinders my budget and plans.    I'll have to make big changes to absorb this price increase.

joseph

[dongillis]

PayPal here reader ordered. I have a small coffee stand so I will  try it out and let y'all in the same boat as me know if it's a suitable replacement

[Tr3]

What will you use to choose what item you’re ringing up? Like the menu? I’m researching for that now

[mat]

I was told to "remember to not just leave because the of the price increase and make sure you do what's best for your business." Because apparently they think that giving them over 40% more money is what's best for business. Looks like Lavu can transfer all the loyalty and sales history and incorporate PayPal which is the old Square rate. Lavu is going to cost $69 a month, but that's not much more once you figure that you're paying for loyalty and other backend upgrades on Square. There seems to be an issue with transferring gift cards though. I think I'm going to give it a try though as it seems to be the best option so far and will report back. Anyone have any experience with Lavu?

[ExFan]

This reply was created from merging an existing thread: New Fees for Small Transaction Sellers Unacceptable 

You should really consider having another Fee structure for small transaction sellers. My effective rate with the new Fee will go from a 2.75% to 4.40%. Which is not only unacceptable for me but not even viable. Please look into this. Meanwhile you will find me in Paypal Here. Thank You. Only spoke praises of your company until this change. Too drastic. 

[mhugil]

We have been with square since the beginning. All payment processing sucks. All the fees [hurt] us. Square is now doing the same after years of me telling people to move to them. This does not fit our business model at all. Yes, I can increase my prices but not to the point of putting me out of business. The struggle is real in a small business. The Square stock I believe is the major reason for this. https://www.cnbc.com/2019/09/26/buy-square-because-the-negativity-around-the-stock-is-about-to-chang....  We are all just screwed and the square owner will take his bucket of money from his shares and not give a rats ass about any of us.

[alexandriak]

PayPal is updating their refund policy and will no longer be issuing refunds on their fees if you refund a customer. I'm not sure how often you may issue a refund, and I'm not sure if PayPal here is affected but I would look into it.

[Tr3]

So where are we all switching too?

[RoasterChica]

What about Clover?  Do gift cards transition with them? Obviously that's a major concern.

[cmusicshop]

Can't tell you about gift cards with them but I did look at them since this ruckus started.  Yes, you can get 2.3% plus .10 if you buy their devices starting at $499 (compared to Square’s $399) but guess what?  $29 per month for the software (not optional).  And it is the .10 that has the most impact, yes?  The cheaper device option is 2.7%+.10 and I think $14.99 per month.

[RoasterChica]

Right @cmusicshop!  I called Clover today and for anyone considering, it's actually 2.3% +.15 per transaction plus $29 subscription, and the cost of all new equipment.  They come closest otherwise, but the gift cards won't transition which would be a major hassle.

[ryanwanner]

Hey @RoasterChica thanks for doing the footwork on this one!

Let me get this straight:

Square's new fees on a $5 ticket would be 23¢

Clover's fees on a $5 ticket would be 27¢. Plus new equipment, monthly fees, and whatever other hidden trick they decide to pull. Plus no Gift Card compatibility.

Hmmmmmmmm........... *evil grin*

[RoasterChica]

The math would be correct @ryanwanner . 

To be fair, Clover offers free scheduling using Homebase, which would integrate with our payroll processer, so I could get rid of our scheduling app at about $600/yr.  

Clover also offers some kind of included loyalty/marketing program, saving me about $45/mo.

Still, for me the $ saved wouldn't be worth the hassle of switching right now.  And there's never a guarantee that a new processor won't increase their rates too.

[ryanwanner]

@RoasterChica You can use Homebase through Square and bring the fees down. Look for it in the App store on your dashboard. It's $29.95/mo when you link it directly through Square.

As for the loyalty and marketing, yeah, it's a pricier option with Square. But, I set up one of the automated "We Miss You" campaigns back in January 2016. That single campaign has brought in almost $9000 in sales I would have lost. It's paid for itself many times over. 🙂

[RoasterChica]

ooh, I will.  Thanks for that @ryanwanner .  I know I'm way under-utilizing the Marketing, so I'll look into that.

Really appreciate those tips!

[pessosices]

Yup, we use homebase and link it to square payroll and it works great! And while marketing & loyalty can be a little pricey, the value and payoff is absolutely huge and saves us so much time and money, and earns us so much in returned customers that it’s so worth it!

The fact that it’s all connected and just works seamlessly with almost no manual input and work for my employees or myself is worth soooo much for the success and growth of my business. I could talk for days about how much I love square loyalty. 

[mhugil]

To Roasterchicka - I found clover to be more money all around from us.

[Writerfl]

Another small coffee shop here. This change will effectively double my card processing fees. There are a lot of competitors out there, many affiliated with small local banks. I can't see my affiliation with Square lasting any longer than satisfaction of my (third!) Square Capital loan, which was a lot more lucrative to Square than card fees collected. 

Congratulations, Square. I hope that hole you just shot in your foot takes a LONG time to heal.