Does Square take out a percentage?

Square: Transaction Fees and Costs

Square is a popular payment processing platform that empowers businesses of all sizes to accept payments both in-person and online. Understanding the associated transaction fees is crucial for businesses considering using Square’s services.

Transaction Fee Structure

For every online purchase processed through Square, the platform charges a transaction fee of 2.9% plus 30 cents. This fee applies to all types of online transactions, including:

• Credit card payments
• Debit card payments
• Gift card redemptions
• Electronic checks (ACH)

Calculation

To illustrate the transaction fee, let’s consider a hypothetical online purchase of $100:

• Transaction fee = 2.9% of $100 + 30 cents
• Transaction fee = $2.90 + $0.30
• Transaction fee = $3.20

Therefore, the business selling the product would receive $96.80 ($100 – $3.20) after the transaction fee is deducted.

Additional Fees

In addition to the transaction fee, Square may charge additional fees in certain situations, such as:

• Chargeback fees: If a customer disputes a transaction, Square may charge the business a fee of $15 to cover the associated costs.
• Manual entry fees: If a transaction is manually entered rather than being processed through Square’s app or system, a fee of $1 per transaction may apply.
• Third-party fees: Square may partner with third-party platforms for additional services, such as gift card processing or loyalty programs. These services may incur additional fees.

Considerations

When evaluating Square’s transaction fees, businesses should consider the following factors:

• Volume of transactions: Businesses that process a significant volume of online payments may incur substantial transaction fees.
• Average transaction value: The transaction fee as a percentage of the average transaction value should be analyzed to determine the impact on profitability.
• Comparison to competitors: It’s advisable to compare Square’s transaction fees to those of other payment processing platforms to ensure competitiveness.

By understanding Square’s transaction fee structure and considering the factors above, businesses can make an informed decision about whether Square is the right payment processing solution for their needs.