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]
Fresh-Faced Recruit
Joined: Oct 1999
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...