Mobile Payment Firm Square Drops Transaction Fee
Using mobile payment technology Square to process your credit card purchases? You'll no longer have to pay 15 cents for every transaction, the company announced Tuesday.
The San Francisco-based start-up—whose clients primarily are small businesses—previously took a 2.75 percent cut of every purchase in addition to the 15-cent fee. Credit card numbers entered manually will still be subject to both the percentage and the fee, but you'll be able to avoid the flat fee by swiping the card. There's no charge for the actual Square device. (If you want a designer version—by Vivienne Tam—that's extra, of course. You'll pay $10 at viviennetam.com.)
Keith Rabois, general manager of Square, told TechCrunch the inspiration for the dropped fee grew out of a desire to stop business owners from being unpleasantly surprised when hit with processing fee bills.
"The vision of Square is to create zero friction and complexity around payments, which is difficult to do in financial services," Rabois told TechCrunch. "In the end accepting payments should be as easy as using a microwave."
Intuit last week extended its offer of a free version of GoPayment, its Square competitor. GoPayment charges 15 cents per transaction, plus it takes a varying percentage (starting at 1.7 percent). Another competitor, VeriFone, charges 17 cents per transaction, along with an activation fee and a monthly fee.
Square was founded two years ago by Twitter creator Jack Dorsey. It's currently valued at approximately $240 million and recently was reported to be signing up 100,000 new merchants every month. Last week, it acquired four billboards in Times Square—a huge change from the company's $3,000 marketing budget in January.
Inc. contributing editor Courtney Rubin was for five years a London-based staff writer for People magazine. Rubin, a former senior writer for Washingtonian magazine, has written for the New York Times magazine, Time, Marie Claire, and other publications. She is the author of The Weight-Loss Diaries.