What is the payment processing fee for Square?

Understanding Square’s Payment Processing Fees: A Clear Breakdown

Square has become a ubiquitous tool for businesses of all sizes, streamlining the process of accepting payments. Its appeal lies in its user-friendly interface and the ease with which it integrates into existing workflows. However, understanding Square’s payment processing fees is crucial for managing your business finances effectively. While their transparent fee structure is a plus, knowing the specifics can help you optimize your payment acceptance methods and minimize costs.

Unlike some payment processors with hidden fees or complex tiers, Square aims for simplicity. Here’s a detailed breakdown of their standard payment processing fees:

1. In-Person Transactions (Swipe, Dip, or Tap):

This is likely the most common scenario for brick-and-mortar businesses using Square’s card readers. When a customer swipes, dips (inserts chip card), or taps (using contactless payments like Apple Pay or Google Pay) their card, Square charges a fee of 2.6% plus 10 cents per transaction.

• Example: A $100 sale processed via a card reader would incur a fee of $2.70 ( ($100 * 0.026) + $0.10 = $2.70 ).

2. Online Sales:

For businesses selling goods or services online through a Square Online store, or using Square’s payment links, the fee structure is slightly different. Online transactions are charged at a rate of 2.9% plus 30 cents per transaction.

• Example: A $100 online sale processed through Square Online would incur a fee of $3.20 ( ($100 * 0.029) + $0.30 = $3.20 ).

3. Manually Entered Card Details & Cards on File:

When you manually enter card details (e.g., over the phone) or charge cards that you have on file for recurring payments, the risk of fraud is considered higher. Consequently, Square charges a higher fee for these types of transactions: 3.5% plus 15 cents per transaction.

• Example: A $100 payment processed by manually entering card details would incur a fee of $3.65 ( ($100 * 0.035) + $0.15 = $3.65 ).

4. Invoicing:

For businesses using Square’s invoicing feature, the fee structure lands somewhere in between in-person and online rates. Sending and processing invoices through Square incurs a fee of 3.3% plus 30 cents per transaction.

• Example: A $100 invoice payment processed through Square would incur a fee of $3.60 ( ($100 * 0.033) + $0.30 = $3.60 ).

Important Considerations:

• Custom Pricing: Businesses processing over $250,000 annually and with an average ticket size over $15 may be eligible for custom pricing. Contact Square directly to discuss these options.
• Hardware Costs: Remember to factor in the initial cost of Square hardware, such as card readers and terminals.
• Subscription Services: Square offers various subscription services that may affect your overall cost, providing access to more advanced features. Analyze your needs carefully before subscribing.
• Alternatives: While Square’s simplicity is attractive, it’s wise to compare its fees against other payment processors to ensure you’re getting the best deal for your specific business needs.

In conclusion, understanding Square’s payment processing fees is crucial for effectively managing your business’s finances. By knowing the rates associated with different transaction types, you can make informed decisions about how you accept payments and potentially minimize costs. Review your transaction data regularly and compare Square’s fees with other options to ensure you’re optimizing your payment processing strategy.