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

[GeorgeX]

Very intelligently written, Mike. Thank you. I agree with everything and especially like your idea of escalating this to Jack. It may take a media blitz to get his attention since this forum is a closed community which they can easily ignore until the storm blows over.

If there are any media (social or other)-savvy people on this board who have media contacts &/or large numbers of followers, that may be what it takes. 

[mike501]

..

[1369Coffeehouse]

Does anyone have experience using another payment processor with Square?  What is your setup?  What works well?

[RoasterChica]

@1369Coffeehouse to my knowledge you can't use another payment processor with Square.

[DebShi]

Anyone else here already paying more than this new increase?

My current rate is 2.75% + .10 per transaction.

Haven't gotten an answer from square yet as to why I'm in a custom price bracket.

What's the deal? I use all square hardware and software.

I am a coffee shop, bakery and cafe that has around 8500 total transactions a month. I pay square around $3000/MONTH in fees, loyalty and employee management. Over $30,000/yr.

I've been paying this rate for 2 years.

While I'm bummed that this new increase is hurting many of you, I'm wondering how square will settle this up with my  business. Do I get a refund for the past two years of overcharging?

I've been a loud and enthusiastic supporter of square. I love the ease of use, the data and the seamless nature of this POS but this is just too much. 

Anyone else out there already paying a higher rate and how did square explain this?

SQUARE, please make this right.

[alexandriak]

Have you called and talked to someone about this or sent an email?

[DebShi]

Yes. Last week. Still waiting to connect with an account manager. East Coast/West Coast time zones getting in our way, perhaps... I'm just curious how many other people are in the same boat.

By the sound of the voiciferous protests and the 6500 signatures on the Sprudge petition most coffee shops were paying the flat 2.75%.

[gariston]

Depends what you signed up for when you got it. Different programs have different rates. For example Square terminal or Square Restaurant and so on. 2.75% was for plain old Square.

[DebShi]

As far as I know I have plain old square, I can't find anything different in my settings.

[redbudcoffee]

This is going to really hurt coffee shops and small cafes. Average sale and volume should have a high effect on what our fee is. This new fee schedule will bleed high-volume, low average sale businesses (like a coffee shop). Figure something else out.

[DD2018]

I signed up just to this site just to give this opinion.

This decision will drastically change our business model.

We can not lose a dime on every $1 item we sell (snacks, beverages, minis, cheaper comics, etc).  We make a lot of these types of transactions, and sometimes these small-scale transactions are what we need just to pay the bills, fees and rents on slow months.  Marking up products is also not an option, as these items are priced already appropriately where they should be.

You are essentially getting paid 3 cents more than the government at this point for every transaction...this is not about offsetting costs...this is about profit.

Please re-evaluate this...we are currently considering other POS options at the moment because of this.

[DD2018]

Also, just to clarify...nothing wrong with making some profit...that is what ALL OF US are here for.

However, an extra dime for low transactions is just no going to cut it.

I have read through the replies and really like the idea of "tiers" to make this more comprehensive for really small scale businesses and those of us that need to get by on concession sales as well.

Also, a slight increase of percentage to 3% or even as high as 4% might be okay...it will be an adjustment for sure...but not a life altering one.

Either way...I like the tier idea...something common sense for the layman just trying to get by with smaller transactions.

[ClaroCoffee]

We just opened a new coffee shop in August. After hours of research and phone calls, we finally decided to go with Square for our POS system. We loved square because of its intuitive design and its fee structure. When we got your email on Monday about the rate hike, I was shocked. Our average transaction is around $5 and with that rate hike, we will now be paying almost double in fees. How are you justifying this rate increase? If this rate increase does actually happen for my business on November 1st, I will have no choice but to change providers. Even if I have to start all over and pay more for a new POS system, I will just based on the principle of your shady business practices. You have obviously planning this since before our company signed up with square. You lured us in with your attractive fee structure, then changed everything on us less than 2 months later. This will kill new businesses like ours. If your company can't come up with a solution to this problem, you will definitely lose our business. 

[redbudcoffee]

I think small shops like mine are best to move away from Square as this has undoubtedly cut into our margins to an unacceptable degree. IMHO, if you're looking to switch like us, move to an Interchange Plus like Dharma Merchant Services or Fattmerchant. On average your rates will be significantly lower.

Sorry Square, but it was your decision to undermine the very thing that sold many customers on your services in the first place. You need to know this isn't just business, it feels like a betrayal.

[cmusicshop]

For everyone posting about switching, let me first be clear - I have no stake other than helping business to business, I'm a Square customer (not always happy either) and get NOTHING from Square.

Please be sure to check everything!  @redbudcoffee posts about an interchange plus service.  Currently interchange rates, which are set by Visa/MC/etc are 1.51% plus .10 (for typical Visa charge method).  Even if you could get a service that is interchange only you are still paying that .10 and that it what the real issue is, right?  The dime effectively doubles (almost) the fee over the old flat rate.

Both Dharma and Fattmerchant charge interchange plus - I'm not sure if that means the .07 plus and .08 respectively, is in addition to the .10 that is part of the interchange or not.  The websites wording isn't clear but Fatt says 8 cents PLUS interchange fees.  Best case, you save 2 to 3 cents plus a better rate for a few more cents in your pocket.  Worst case is those are in addition and you'll be paying more than Square's new rate.  Make sure before you sign up.  Also, Fattmerchant has a $99 per month charge.

It would appear then that Square is moving from flat rate to interchange plus.  No markup on per transaction (10 cents interchange/10 cents Square)  and 1.1% markup on interchange.

Second, I know stuff like this feels personal, it isn't.  It sucks not to have more advanced knowledge, it sucks to build your business with a certain rate only to have that change.  I hope for your behalves, that Square could implement a rate on lower ticket sales that would be better.  Please do your due diligence before jumping ship, don't let anger or betrayal cloud your reasoning and do what is best for your business.

[DD2018]

I know what you mean...our knee jerk reaction is to jump ship over the rate hikes...we calmed down a bit, but we did have other disconcerting thoughts.

Our other reasons upon contemplation for considering other options is we asked ourselves "do we want to associate with a company that was basically not making ends meet for itself until now to the point that they have to up-hike suddenly in such a dramatic fashion?"

Doesn't exactly inspire a lot of confidence in the financial security involved with this particular group.

We haven't made our move yet, but our confidence in this group to manage money not only their own money but ours is irreversibly damaged.

I am certainly not saying that it is any more rosier elsewhere, but at this point it all now looks about the same...so this debate is no longer about the money...it is the confidence in their ability to manage that money.

[joea16]

Maybe Square wants us to leave or pay! Doing the math Square would be increasing my fees

40% that is outrageous!

[thefew78]

I'll stay with square if you give me a free square register.  The register looks nice and the customer display would come in handy. This might make  the increase a bit easier to swallow. 

[GlassJudy]

So you'll stay with Square if they give you a $1,000 system, plus lower your rate to 2.5% + $0.10?  I think you're asking a bit much (the new rate doesn't affect the Register's rates.)  When we decided to go with Square, we decided on the Register system since that seemed to be the best fit with our business, and with the best rate for us (our average ticket is above the break-even point with other charges.)  I whole-heartedly promote the Register system.  We have been using it just over a year and we love it, and it has paid for itself several times over compared to our old rates.

[kikisbakeshop]

For my business this would be a 13% increase in processing fees.  You have always been slightly above industry average for fees, but you have a great system, so we have stayed loyal.  But, a 13% increase?  No thanks.  We will be moving on.  

[Ron]

Why not just increase your prices by a mere 10 cents each? Customers won't even notice and nothing will change for you.