Last year, popular mobile payments company Square introduced a $275 monthly flat-rate fee for small businesses with less than $250,000 in annual sales.
Come Feb. 1, 2014, that option will no longer be available. Instead, businesses of all sizes will be subjected to the same "simple" flat-rate-per-swipe pricing: they will be charged 2.75 percent on all swiped or online transactions completed with a major credit card; and they will be charged 3.5 percent plus $0.15 per transaction for any sale that is manually entered. The funds (minus that fee) are deposited by the next business day.
The new per-swipe fee policy will apply to transactions as of the beginning of February. If a company wants to switch before then, it needs to do so before the beginning of the December or January (since the monthly fee is charged at the start of each month to cover what comes).
In a blog post explaining the new fee structure, the company said it changed its pricing policy as a result of complaints from fast-growing businesses. "Over the past year, we heard from many of our customers that caps and limits in the program were inhibiting growth -- at a certain point, rates went back up the more you sold," the blog notes.
Later on, the company mentions that it is "hard at work building features for larger businesses." (They can already negotiate lower per-swipe fees, by contacting the company directly.) Read between the lines on that one. Obviously paying more per-swipe for higher sales volumes doesn't make sense.
But small retailers or merchants will pay far more under this structure (all it takes is $1,000 in sales to break above what they were able to pay before under the monthly plan). Bah humbug!