Square Offers Flat Fee Per Month, All Swipes Included Option

Square, the mobile credit card payments startup, is cutting small-business owners a break, offering a flat fee per month with an all swipes included option. 

Pricing

According to a blog post, you can pay $275 a month, up to $250,000 a year in revenue. Above that rate, it's a flat rate of $1 per transaction, plus the old 2.75 percent fee. You'll also pay the 2.75 percent on any purchase above $400.

Crunching the Numbers

How good of a deal is it? The math suggests if you're pulling over $10,000 per month in swipes, you should go for the flat rate. Although if you expect to get above $250,000, you may want to reconsider.

The flat fees and the regular 2.75 percent fees are both, of course, a departure from the usual 3 to 4 percent small businesses frequently pay credit-card processing companies, as well as a departure from the guesstimates required in picking a payments processor. (Click here for a comparison of credit-card processing companies and their monthly and transaction fees.)

“With one monthly price, merchants know that the sales they’ve processed in a day is the same amount deposited in the bank,” says Square co-founder and CEO Jack Dorsey in a statement.

Expected Growth 

The company said in June that it had reached 2 million users, up from 1 million a year previously. That number is expected to grow rapidly, with Starbucks' announcement last week that it will invest $25 million. The coffee giant will eventually use Square technology to process all credit and debit transactions in some 7,000 of its U.S. stores. The investment values Square at $3.25 billion, according to The Wall Street Journal.