Square's transaction fees vary depending on how a payment is processed. Rather than a single, flat percentage, Square applies a combination of a percentage rate and a fixed fee per transaction.
Understanding these different rates is crucial for businesses using Square, as they directly impact your net earnings. The fee structure is designed to cover the costs associated with processing credit and debit card payments, including interchange fees, assessment fees, and other operational expenses.
Square's Transaction Fee Structure
Here's a breakdown of the standard processing fees Square charges for different types of transactions:
| Transaction Type | Percentage Rate | Fixed Fee |
|---|---|---|
| Card Present (In-Person) | 2.6% | $0.10 |
| Online (Square Online Store/API) | 2.9% | $0.30 |
| Square Payment Links | 3.3% | $0.30 |
- Card Present (In-Person) Transactions: This rate applies when customers pay by tapping, dipping, or swiping their card using Square's hardware (e.g., Square Reader, Stand, Terminal, or Register). For instance, if you process a $50 in-person transaction, Square would take $1.30 (2.6% of $50) plus $0.10, totaling $1.40.
- Online Transactions (Square Online Store or eCommerce API): This rate is applied to sales made through a Square Online Store or when payments are processed via Square's eCommerce API, typically for online storefronts integrated with Square. For a $50 online transaction, Square would take $1.45 (2.9% of $50) plus $0.30, totaling $1.75.
- Square Payment Links: This rate applies when you generate and send a payment link to a customer for them to pay securely online. For a $50 transaction via a payment link, Square would take $1.65 (3.3% of $50) plus $0.30, totaling $1.95.
It's important to note that these rates are standard for most businesses using Square. Businesses with very high processing volumes or specific industry needs might qualify for custom pricing directly from Square.
Understanding the Fixed Fee Component
The fixed fee component (e.g., $0.10 or $0.30) is a flat charge applied to each transaction regardless of the transaction amount. While it seems small, this fixed fee can represent a larger percentage of very small transactions. For example, an in-person $1 transaction would incur $0.026 (2.6% of $1) + $0.10 = $0.126, which is 12.6% of the transaction. Conversely, for large transactions, the percentage fee dominates.
Factors Affecting Your Total Costs with Square
Beyond the basic transaction fees, consider these aspects that can influence your overall costs:
- Refunds: When a transaction is refunded, Square typically does not refund the processing fee that was originally charged.
- Chargebacks: If a customer disputes a transaction (initiates a chargeback), Square may charge an additional fee to cover the administrative costs of the dispute process.
- Hardware Costs: While separate from transaction fees, initial investments in Square hardware (readers, stands, registers) are upfront costs for accepting payments.
Understanding these varying rates and potential additional costs allows businesses to choose the most cost-effective method for their sales and accurately calculate their net revenue. For the most current and detailed information, always refer to Square's official pricing pages, such as Square Credit Card Processing Fees.
