Square is changing their pricing on swipe/dip/tap transactions beginning November 1, 2019. Instead of a flat 2.75% fee, the fee will become 2.60% + a 10¢ fee per transaction/swipe.
Depending on the nature of the business, some people will save money and some will lose. Anyone who uses it to process larger transactions can save quite a bit from this change. Square is from the most popular payment processors, especially for small time operations, and I’m sure there are a number of readers who use them.
Note: These changes are only for physical swipe/dip/tap transactions. Online stores have always paid 2.90% + 30¢ which will continue as before. Card-not-present transactions have always been 3.5% + 10¢ which will continue as before.
Hat tip to reader Michael
I believe Card-not-present transactions are 3.5% + 15¢ – not far off but still 😉
The number I wrote comes from the FAQ. Possible there are some other variations based on circumstances.
I bet my trailer guy wishes I had waited to pick up my new trailer then. Ran a $6k+ payment through Square a couple days ago. I think he would be fine with the extra 10 cent charge in exchange for the lower rate.
But hey, I needed to finish my bonus for the Amex cash 2% card. 😀
This matters most for coffee shops. A $3 charge used to cost 9 cents, now its gonna cost 18 cents. A 100% increase in processing fees (if all of their transactions were just $3)
True, but Square is legitimately losing money on those transactions, so I imagine they’d be ok with losing customers who mostly process charges of ~$3
I expect to see more “No credit card under $5” signs. Or 20 cent price increases for low-price coffeeshop items such as drip coffee.
Do millenials even carry cash now? I can’t see a coffee shop turning away all that customer base over 20c
I agree that many millennials don’t carry much cash. But I think there’s something to be said about preparedness and level of adulting if you don’t have at least a FEW dollars in cash on you.
Well that’s going to hurt a lot of fast causal places (cafes, food trucks etc.). Basically a 2% increase in costs on a $5 coffee. Realize it doesn’t sound like much but it adds up and the current ecosystem is a big reason you don’t get pushback from merchants for small dollar credit card purchases.
I would imagine Cash App transactions will quickly follow at a much lower rate with Venmo hopping in right behind for PayPal merchants.
At or above $66.67 it’s a decrease, under that is an increase.
bro do you even math???
His math is right.
@Thom, could you please clarify what point you are trying to make?
It’s simply a calculation of 0.10/0.0015. You are being charged more fee if a swipe is below $66.67.
November 2020? or this year?
Fixed now, thanks for pointing out
Hmmmmmm. So card not present transactions cost more than card present.
Yes. They’re considered higher risk.
It’s always been like this… because of the increased risk.
That’s always the case, due to the increased chance of fraud on not-present
Although the thinking is that Card Not Present transactions are higher risk, this is entirely due to CVV2/CSC2/etc not being collected by some merchants and the low adoption rate of Verified By Visa, MasterCard SecureCode, AMEX SafeKey and so on (as well as the terrible implementation some issuers have for providing that second factor).
Good point UA. Verified By Visa and MasterCard SecureCode- I’ve heard of those. But I’ve had Amex for 5 years and never heard of or saw SafeKey.
Best Buy uses Amex SafeKey. It pops up during checkout if you pay with Amex. They also implement the MasterCard SecureCode and I’ve gotten challenge prompts with Citi cards.