Square popularized the Flat Rate pricing model by charging you one rate based upon how the card is taken. This article will go into detail on what is square credit card processing and its associated fees.
Using a Square Reader you will be charged 2.6% and $0.10 per transaction because the card is present.
If the card is not present, you can send an invoice or use Square’s Virtual Terminal. The invoice will cost 2.9% and $0.15 per transaction and the card charged in their virtual terminal will cost 3.5% and $0.15 per transaction.
An example of Square’s Fees if you charged $10,000 would be ~
- Using the Square Reader = $260.10
- Sending an Invoice = $290.15
- Using the Virtual Terminal = $350.15
What is Square Credit Card Processing?
Square has done a great job simplifying the merchant processing industry while adding a variety of services to their product line. This includes online integrations via Weebly, calendar scheduling, payroll, capital, and more.
What is a Virtual Terminal and Why Would I Need it?
A virtual terminal turns your computer into a credit card terminal. It’s perfect for remote billing or taking credit cards over the phone by typing in the credit card details directly into an online portal. Within a Virtual Terminal, you will typically have the ability to do recurring billing, store customer profiles, and view transaction reports.
What is a Mobile Reader and Why Would I Need it?
A mobile reader is a physical piece of hardware that would connect to a phone or tablet. You can connect by the headphone jack, lightning port, USB C, or Bluetooth. This device allows you to take payments while out in the field either by Mag Stripe (aka Swipe) , EMV (aka Chip) or NFC, Near Field Communication (aka contactless payments or Tap to Pay).
How Credit Card Processing Works
Let’s take a look at a basic overview of how credit card processing works.
A typical credit card transaction involves the following parties:
- The Issuing Bank
- The Credit Card Networks
- The Processor
The issuing bank gives the customer a credit card. It might be a company like Bank of America, Citibank, or Chase.
The credit card networks work with banks to provide those credit cards. An example of a credit card network is Visa, MasterCard, or Discover.
The processor is the intermediary that communicates between these two entities. They might be called independent sales organizations (ISOs) or merchant service providers (MSPs).
Now let’s discuss pricing, specifically the most popular pricing methods, flat rate, tiered and interchange-plus pricing. This will allow you to determine what option would be best for you when it comes to choosing your merchant processor.
How Much Does Square’s Flat Rate Charge Versus Interchange Plus Pricing
Made popular by Square, the Flat Rate pricing method allows you to pay a set rate no matter the cost of the card. This means that the rate will be set to always cover the costs on even the most expensive cards. Some processors will charge a tiered pricing structured, which means that certain cards get grouped into certain buckets. The merchant processor determines what rate to charge all cards in each bucket and you could end up paying much more than you should. Some of these processors will try to convince you that they have the lowest rates by quoting you one of their lowest-rate buckets when in reality you’re not getting the full picture when it comes to overall costs.
It is important to understand the interchange rate, or the actual cost of the card, is what the card brands (Visa, MC, Discover, AMEX) charge for utilizing their credit cards.The average interchange rate is ~1.81%.
The best merchant processors remain simple, honest, and transparent. They usually charge interchange-plus prices, which means they’re charging you the true cost of the card, plus a small service fee. It lets merchants pay on a per-card basis, which saves everyone more money.
Feel free to reference our pricing page’s calculator to show how much Payline interchange plus plans would charge in comparison.
What are Some Square Credit Card Processing Alternatives?
If you’re looking for some alternatives to how much square charges, Payline is one of the best options, and gives you all the same feature and tools as Square. Payline saves you between 0.5% to 1 % per transaction compared to Square’s flat rate, which equals a savings of about 40 percent. So, if you’re an actual small business with thousands of dollars in transactions a month, Square might not make the most sense because you’ll be paying much more than you need to.
What Will I Get With Payline?
Mobile Credit Card Reader
If you’re looking for a credit card reader for iPhone, Payline is a great choice because they offer an intuitive and secure credit card reader for iPhones and Androids. You’ll be able to accept payments anywhere you go.
Payline offers flexible payment processing solutions tailored to suit your business needs, including integrations with software like:
With Payline, you’ll be able to integrate hundreds of apps to make it easier for you to do business online or in-person. Need a custom integration via API? We’ve done this for thousands of clients. Talk to an expert today and we can discuss your specific needs.
If you have a brick-and-mortar business (like a salon or a coffee shop), Payline can offer retail payment terminals that provide a clean, fresh look for your establishment. Make it quick and easy for customers to pay with a secure, intuitive checkout process. With a tool like Payline’s POS software and hardware, you can print or email receipts, add tips, and more.
Additionally, Payline also offers a secure way to store and tokenize your customer payment information via a secure mobile app. This makes it easy to provide refunds and send receipts and allows customers to tip you.
A POS system through Payline can help you:
- Increase sales with email campaigns, gift cards, and product ordering
- Reduce your expenses with more than 300 business apps
- Prioritize customer convenience with scheduling
- Integrate with multiple devices (including iOS devices)
Next, it’s common that you won’t be able to speak directly to a person on your first try due to the size of Square. With our sales agents and support team here at Payline, we are ready to speak when you are.
What is Square Credit Card Processing: Conclusion
While Square might be a better option for hobby businesses making less than $1,000 in sales each month, businesses bringing in more revenue might want a cheaper and more robust option when it comes to payment processing. In conclusion, whether you need a merchant processor to help with retail payment processing, eCommerce payments, integrated payments, or mobile payment processing, Payline can help.
Talk to a payment expert today to discover just how Payline can help you find affordable in-person, online, and/or mobile payment solutions. With Payline’s pricing plans, you can look forward to the lowest pricing, while taking advantage of software features like recurring billing, invoicing, ACH payments, and a Payments page. The best part? Your first month is absolutely free, so there’s absolutely no risk.