Square Is Discontinuing Monthly Pricing On February 1, 2014

An anonymous reader writes "Mobile payment startup Square has decided to discontinue its monthly pricing option on February 1, 2014. The company says it does not plan to reinstate monthly pricing at any point. If you are currently enrolled in monthly pricing, Square will give you "a grace period" through the end of January 2014, after which the per-swipe rate will apply to transactions. On January 2, monthly pricing subscribers will be billed their last monthly fee, which will cover the rest of the month."

Comments

Big deal.

[viperidaenz]

It's a hit to larger companies, not smaller ones.
Switching from $275/mo flat rate to 2.75% means if you're selling more than $120,000pa, you pay more, if you're selling less, you pay less.

next story please.

Re:Big deal.

[aaronb1138]

Really a good sized hit to small to middle sized businesses.. you know the mom & pop shops, indie food trucks (the minority) and such that manage to support 2-5 people with corporate incomes of 250k-2m per year.

A small company with CC swipes of $120k / year with an assumption CCs only being half their income, and the rest cash or invoices (checks), barely supports 1 person if the net margins are very high, in the 20-40% range and tax sheltering is very good.

Glad to see how well educated the techie community is on basic finance and business concepts.

Of course, we know that with the standard margin in CC processing being 3% for many years, it was very expected by any reasonable person that Square would ditch flat rates once they had little enough competition and a large enough base.

Re:Big deal.

[peragrin]

and yet you know nothing of how much a business needs to earn to pay a single person $40k a year.
Just because the company has $120,000 in revuene, doesn't mean the owner earned $120k. Now you have to take off expenses which is on that figure probably close to 95% of it.(depending on how the equipment was purchased)

Re:Big deal.

[squiggleslash]

I suspect he's right. While many Slashdotters have experience of being contractors, and setting up a small business to legally manage that, that's not typical of a normal small business which will generally involve: a small number of employees, but more than one; rent; non-trivial supplies; capital costs; etc. A single person business who works out of a laptop and smartphone and has no other costs other than travel isn't unusual but it's not typical.

Think in terms of what it costs to run a pizzaria, one of the classic small businesses. You have yourself, you have a group of employees to the point you generally have a minimum of two on duty (besides yourself) during opening hours, more at busy periods. You need to rent a shop, which doesn't have to be huge, but it'll cost considerably more than those cheap single room "offices" you see advertised as "starting at $500/month!" by the road. And, of course, you need flour, water, anchovies... oh and gas, and electric, and phone service, and advertising and printing...

Now, this doesn't mean going into pizza making forces you to live in poverty or go bankrupt, far from it, because pizza is popular, and people are willing to pay quite a bit for a decent pizza. Or even half decent pizza. That's why there are so many pizza chains. But the question isn't "why doesn't pizza make a profit", it's "How much turnover do you need before Square's monthly rate becomes better and does a typical small business qualify", and it seems hard to believe that an average pizzaria has a turnover so low it wouldn't qualify. Even if the franchisee, at the end of the day, goes home with a salary of $50,000, that's just one small part of the costs.

Re:wut?

[digitalchinky]

It appears to be some kind of slashvertizement for a mobile credit card reader that plugs in to the headphone jack of an iphone.

in other words...

[Anonymous Coward]

they're adopting the pricing scheme of every other payment processor, including paypal and intuit (both of which have a very similar device and service), google checkout (wallet) and ordinary credit card merchant accounts.

Re:Swipe?

[Anonymous Coward]

In just over 1 year you won't have to. At least in Canada, after 2015 debit card companies will no longer need to include a magstripe unless they really want to. I expect credit card companies will follow suit quickly. Magstripe fraud is costing both huge amounts.

At that point square's equipment will be as good as garbage. I'm sure as a backup for places that refuse to upgrade they'll still be able to take imprints, just like 50 years ago.

Re:It is not flat

[kramerd]

The plan was $275/month or 2.75% per swipe. However, the 275 per month was limited to the first $10,000 (ie $275 in fees). After this, it defaulted to the 2.75% anyway. Therefore, if you chose monthly, and didn't use it all, you actually paid a higher price. By definition, you could always just take the 2.75%, so I don't know why anyone would ever choose the monthly plan in the first place.

Re:Swipe?

[BKX]

Simply opening one of the card readers will completely brick them.

Probably not. I've repaired and/or replaced many keypads and phone jacks on CC terminals over the years. I've done this for readers made by several different companies and many levels of features, including Hypercom (the most popular brand), and terminals that have RFID readers and external pinpads. Opening them up has always been easy, and they accept my soldering iron and screwdrivers just fine. I doubt there's much in the way of tamper-proofing on the portable ones either, even though I've never worked on them, considering the lack of tamper-proofing on anything else they make.

Re:Swipe?

[BitZtream]

Square is fully PCI compliant because IT DOESN'T STORE YOUR INFORMATION and USES SSL TO TALK TO ITS SERVER. Thats ALL the security you get ANYWHERE on the client side IN THE BEST CASE situation.

Stop spewing shit you know nothing about. 99.999% of the PCI rules are written around the fact that people STORE the credit card numbers. The instant you stop storing card information, PCI becomes ridiculously less complex.

Welcome to what Square does ... it makes all the PCI compliance issues a problem for Square admins, and lets your business do business, not worry about IT.

Chip + Pin might be great, but as has been said by others, I've NEVER seen one, so its not so great that the entire world snapped it up to save the billions in lost dollars ... did they?

You live in a fantasy world, or I suspect is more likely, don't actually own any credit cards.

Do you know that all the information you need to make a card transaction is ... VISIBLE ON THE CARD ... WITHOUT A CARD READER? Yes, thats right ... *gasp* they can just use the visible information on the card to take your money.

Re:wut?

[blackraven14250]

This is actually a widely-used credit payment processor, particularly by local businesses, so this is definitely a change that will have a fairly wide-reaching impact.