Mobile Collection: Square’s Monthly Pricing

• Square now lets merchants collecting up to 250,000 dollar every year pay 275 dollar per months and avoid its generally charged 2.75% processing fee. This option is intended for transactions up to 400 dollars: else a 2.75% commission is charged.

• The offer has been designed for payments relying on Square card readers; CNP transactions requiring manual card data entry are not concerned; in these cases, a 3.5% commission + 15 cents are applied.

• The option may not be a bargain for merchants processing less than 10,000 dollars per months, but those with annual volumes from 120,000 to 250,000 dollars could benefit from it. 
  

Source: Square press release

• In an increasingly challenging environment, with for instance, competitive offers by new entrants such as GoPago (see this month: "Mobile Collection: GoPago Launches GoPago LIVE") or Groupon (see May 2012 Insight), Square could not but rethink its pricing to gain small merchants’ favours and propose specially crafted offers to those with growing volumes. Through this option, Square displays an attractive pricing, relatively similar to the one applied to large companies, and improves both costs and visibility for small merchants.

• In June 2012, over 2 million entrepreneurs (start-ups, micro-commerce, mobile sellers, etc.) and individual customers had already opted for Square, or one million more than the previous semester; these customers only account for 4,000 to 5,000 dollar per year on average according to Aite Group. Square now piles up strategic announcements and tries to diversify its targets. Its development could also be helped by its recent partnership with Starbucks (see "Mobile Collection: Partnership between Starbucks and Square").