Popular mobile payment processor Square has debuted a new plan which promises to do away with swipe fees. For small businesses generating less than $250,000 annually in credit card payments, Square now offers the option to either stick with its standard rate (2.75 percent per transaction) or indulge in its new, flat, monthly cost of $275 with zero swipe fees.
For small businesses doing $200,000 annually in credit card sales, paying a flat rate of $275 per month would be equal to paying a transactional fee of 1.65 percent -- that's more than a full percent less than Square's already industry-leading rate of 2.75 percent. For that same business, 1.1% represents about $2200 in savings each year on credit card processing fees.
Essentially, any business taking in more than $120,000 of credit card payments per year should definitely consider Square's latest offer.
Square is known for its forward-thinking advances in credit card payment processing. As many small business owners will attest, accepting credit cards has traditionally been a fraught with convoluted contracts, hidden fees, rigid policies and slippery sales people. Square pioneered accepting swipes via smartphones while simultaneously doing away with many of the headaches often associated with traditional card processors.
Square and Starbucks recently struck a deal, making the card-swiping outfit the official payment processor of Starbucks. In trade for its services, Starbucks made a $25 million investment in Square while caffeine mogul Howard Schultz gains a seat on Square's board of directors.