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New Square Pricing Structure Cuts Into Business Owners’ Profit Margins

image of a woman paying using a POS system

On November 1st, all Square users started being charged 2.6% plus 10 cents per credit card transaction, instead of the 2.75% that users have been paying since 2011. While 10 cents per transaction may not seem like much, as business owners you know how quickly these charges can add up, especially if your business model is built on a lot of small purchases over the course of each day. 

According to Money.com, owners of coffee shops are especially affected by this price change, as Square will now be taking a cut of 23 cents per $5 transaction as opposed to the previous charge of 14 cents. This is an increase of just under 67%. If you are already feeling the pain of this fee structure, and are worried about passing on the charge to your customers, it may be time to switch your credit card processing service and POS equipment. If you’ve been using Square for years, this may seem like an intimidating and overwhelming process, but know that Monify is here to help. 

We specialize in helping business owners save money and reduce costs. We also believe that knowledge is power, which is why we’re providing you with an overview of what this new Square pricing structure means for you and what your POS service options are going forward. Continue reading to learn more and contact Monify today with any questions you may have about point-of-sale systems. We’re more than happy to talk through your current rates and the packages we can offer you. 

What Does This Pricing Structure Mean For You?

How this credit card fee structure affects your business depends on the size of your average transaction as well as your credit card processing volume. Like we said earlier, if you’re a coffee shop running an average $5 transaction, you’re going to take a bigger hit than merchants with higher average transactions. According to Sprudge, transactions higher than $67 will have lower rates under this new pricing structure. Our experts here at Monify can help you run the numbers for your business and see what the new fee prices mean for you. Many merchants would end up paying hundreds of dollars more per month, and if you’re one of them, the best thing you can do is find an alternative to Square — and Monify can help you do that. Contact us today to get the process started.

Why is Square Making This Move?

The short answer is that they’re not worried about their competition. Square believes that they command such a large portion of the POS services and payment processing industry that they can increase their fee per transition without losing a large portion of their merchant base. But just because this may be a smart business move on their end to increase profits, that doesn’t mean that business owners like you should have to pay more to Square or pass on these costs to your customers. This new fee structure also disproportionately affects smaller merchants and other small businesses, forcing them to work harder to stay afloat. 

If you’ve been using Square for years and have gotten used to the dashboard and reporting feature, switching to a new payment processing system may sound like a hassle that you just don’t want to undertake. We get that, which is why we’re a full business service provider and work with you to grow and protect your business. We are more than happy to answer your questions and talk with you about how the Square fee change will affect your business and whether switching to a different payment processing will prevent a cut in your profits. 

As Debra Baxter, one of our payment processing clients, said of working with our company:

“Merchant fees were killing our business. Monify was able to quickly reduce the fees we paid to accept credit and debit cards. Who knew processing payments could be so easy with the right partner? We wish we found Monify sooner.”

Just because Square is one of the biggest brands in the payment processing industry doesn’t mean that you have to use their service. They’re a business too, trying to increase their profits, but those fees add up — especially for small business owners. If you’re wondering what your options are, contact us today. Partnering with Monify for credit card processing can save you 10-15% off your current credit card fees.

Clover vs. Square

Here at Monify, we offer a full suite of Clover point of sale equipment and accessories. We offer Clover POS Service because we believe it is the best option for our business partners, especially for restaurant owners and those looking for retail payment processing solutions. 

Clover is a larger initial investment, but unlike Square you can add on Clover apps like Register, Promos, Feedback, Rewards, Happy Hour, Clover Dining, and more at no additional cost. Square does offer add-on features, but they come with additional fees — that are charged per month and have the potential to increase just like this recent fee hike. 

While the decision to use a particular POS system is entirely up to you, it’s important to fully understand your options. 

Clover

The primary difference between Clover and Square POS services is that Clover offers greater flexibility. There are more features you can take advantage of when you use Clover’s hardware and software, and it works great for small to medium businesses and restaurants. 

Setup is also easy because Clover comes with a built-in POS, reporting, CRM, and staffing right out of the box. More so, you can personalize your payment processing system using Clover apps like Register, Promos, Feedback, Rewards, Happy Hour, Clover Dining, and more. You also gain access to 24/7 US-based customer support.

Here at Monify, we offer a variety of Clover products, including Clover Flex, Clover Go, Clover Mini, and the comprehensive payment processing solution Clover Station Point-of-Sale. Browse your options here and get in touch with us to learn about how bundle options can save you even more money.

Square

Like Clover, Square has a number of built-in features for reporting, CRM, and stock control. And you can also extend the capabilities of the software to fit your needs by using Square Tools. These include programs such as Square Loyalty, Square Marketing, Square Payroll, and other add ons. 

Square targets new businesses who need a simple payment processing technology without extra capabilities. Square comes with all the fundamental features of a POS system, including a simple till, inventory management, and analytics.

Prosper with Monify

When you partner with our full service business provider, you get the total package. Whether you need a retail merchant account or virtual terminal, we can find the payment solution that fits your needs. We will work with you to help your business stay competitive, compliant, and profitable. If you’re struggling to adjust to Square’s new pricing structure, we can help. In fact, switching to Monify credit card processing can save you 10-15% off your current credit card fees. Browse our point-of-sale systems and get a quote today 

Not only do we offer POS services like Clover and Comdata, we also have cash management safes, financial technology, and legal services payment technology. Learn more about your payment options and see what Monify can do for you!