The mobile payments specialist has announced that it's adding the option for businesses that do up to $250,000 per year in credit card transactions to cut costs. It will allow merchants to pay a flat fee of $275 per month, with no fees or cut. Square had previously charged merchants a flat 2.75% rate.
"Small businesses typically pay higher credit card fees than bigger merchants. We don't think that's right. So we created this first-of-its-kind pricing plan for small businesses processing up to $250,000 per year," the company's Web site said. "The total amount of sales you process in a day is the same amount deposited in your bank account. No additional cost per swipe. Just a lower monthly bill than ever before."
A business processing $250,000 a year in credit card transactions would have had to pay $6,875 per year in fees to Square. With the new pricing structure, it'll cost merchants $3,300 per year. If a business does less than $250,000 per year in transactions, the 2.75% fee is cheaper.Square, led by CEO Jack Dorsey, is innovating as it tries to upend the credit card processing industry, attempting to break the stranglehold of Visa (V), Mastercard (MA) and American Express (AXP). Square recently announced a deal with Starbucks to bring its technology to the coffee giant's 7,000 U.S. locations. Starbucks is also investing $25 million in Square, and Starbucks CEO Howard Schultz is joining Square's board. It's unclear at this point how much Square is making from lowering the cost substantially and if it plans to make it up on volume, similar to the Wal-Mart (WMT) school of retailing. I've reached out to Square for comment on this. Credit card companies, consider the game changed. Again. Interested in more on Visa? See TheStreet Ratings' report card for this stock. Follow TheStreet Tech on your wireless devices. --Written by Chris Ciaccia in New York >Contact by Email. Follow @Commodity_Bull
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV