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Square drops fixed fee to drive more iOS, Android payments

updated 02:45 pm EST, Tue February 22, 2011

Square scraps 15 cent fee to make mobile pay cheap

Square today said it was dropping a fixed fee for payments from its Android and iOS apps. The startup will no longer ask 15 cents for a credit card swipe from one of its readers regardless of how much the user pays. The move will still include a 2.75 percent transaction fee but should be much less of a hit on shopkeepers and other users for very inexpensive purchases, such as food.

Those who have to enter the number by hand, such as without the reader or with a broken credit card, will still pay the fee alongside a 3.5 percent cut of the sale price.

The strategy is expected to help drive share among coffee shops and other companies that want a reader but might be hesitant to absorb the cost per sale. Intuit already has its own partnership for a card reader case and charges both the 15 cents as well as a 2.7 percent cut; frequent customers that handle $1,000 or more every month pay for a $13 subscription that lowers the rate to 1.7 percent with a 30 cent fee.

Square's app is free for iOS (App Store) and Android (Market). The reader itself is free to those who sign up and works through the headphone jack of iPad, iPhone and iPod devices as well as Android. [via AllThingsD]



By Electronista Staff
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Comments

  1. Medazinol

    Fresh-Faced Recruit

    Joined: Oct 1999

    +1

    Credit card costs

    I'd love to accept create cards for my small business but it severely cuts into the razor-thin 4% profit margins of Apple stuff. When the CC company takes their 2.5 or 3% cut it leaves me with pretty much nothing...

  1. testudo

    Forum Regular

    Joined: Aug 2001

    +1

    Re: Credit card costs

    You should sell your stuff through the Apple Store. They only would charge you like 30% to handle the transaction.

    Oh, wait, that would be more, right.

    But you have to understand. Those credit card companies do a lot for that 3%. They verify the card owner (well, they tell you the card hasn't been stolen yet, and they have credit available, but they'll still s**** you over if it turns up later as being stolen or the consumer registers a complaint). And you get to use one of those fancy card-slidey devices. (Or, if you really want retro-chic, get a carbon press type device that copies the card - those are cool!)

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