What percentage does Square take?

Understanding Square’s Transaction Fees

Square, a widely used payment processing platform, offers businesses a convenient way to accept payments. However, it’s essential to be aware of the transaction fees associated with using Square’s services.

Standard Card Payments

For standard card payments, which involve physically swiping a credit or debit card, Square charges a transaction fee of 2.6% plus 10 cents per transaction. This fee is charged for all major credit cards, including Visa, Mastercard, and American Express.

Card-Not-Present Transactions

When a transaction takes place without the physical presence of a card, such as online purchases or phone orders, Square charges a higher transaction fee of 3.5% plus 15 cents. This increased fee reflects the higher risk associated with card-not-present transactions, as the cardholder’s identity cannot be verified immediately.

Factors Affecting Transaction Fees

In addition to the standard fees, Square may charge additional fees based on certain factors, such as:

• Interchange fees: These are fees charged by card networks (e.g., Visa, Mastercard) to banks and credit unions for processing card transactions. Square passes these fees on to businesses.
• Assessment fees: These are fees charged by card associations (e.g., Visa, Mastercard) to cover the costs of network maintenance and security. Square also passes these fees on to businesses.

Alternatives to Square’s Transaction Fees

Businesses may explore alternative payment processing solutions with different fee structures. Here are some options:

• Flat-rate processors: These processors charge a fixed fee per transaction, regardless of the transaction amount or type.
• Interchange-plus processors: These processors charge a fee equal to the interchange fee plus a small markup.

Choosing the Right Payment Processor

When selecting a payment processor, businesses need to consider the following factors:

• Transaction volume: Businesses with high transaction volumes may benefit from processors with lower fees.
• Transaction types: Businesses that process a significant number of card-not-present transactions may prefer processors with lower fees for these types of transactions.
• Additional fees: Businesses should also consider any additional fees, such as monthly fees, PCI compliance fees, and chargeback fees.

By understanding Square’s transaction fees and exploring alternatives, businesses can make informed decisions about payment processing solutions that meet their specific needs and optimize their financial performance.