Mobile payment provider Square today announced a new addition to its simple pricing options for merchants, a flat $275 monthly fee, with zero percent taken per transaction, for businesses with annual revenue up to $250,000. The announcement follows quickly on the heels of last week’s Starbucks partnership reveal, a sign the company was going after customers with more revenue than its initial independent operator market.
The new monthly plan doesn’t eliminate the old model; merchants can still opt to pay 2.75 percent per transaction, with zero monthly monthly fee, if they so choose. That’s an option that’ll make sense for anyone not doing $10,000 or more in monthly revenue. And there’s flexibility built in, too. In an email interview, Square communications representative Khobi Brooklyn confirmed that there’s no contract associated with Square’s new monthly payment option, noting that they’re free to cancel the monthly model at the end of any monthly billing cycle.
Recently, there’s been a bit of a race to the bottom in mobile payments, with Square dropping its $0.15 charge per transaction, keeping only the 2.75 percent fee. PayPal charges only 2.7 percent per transaction for its PayPal Here Square competitor, and recently LevelUp, a mobile payments startup using phone-based barcodes to enable transactions, did away with its per transaction fees altogether, opting instead to make revenue on value-add premium plans.
Square’s move today isn’t quite as dramatic as dropping fees altogether, but it is a very attractive option for small business owners, who are doing more business than, say, the guy selling homemade furniture once or twice a month at the local flea market. “For the first time, there is a pricing structure designed around small businesses,” Brooklyn explained. “Before large retailers got the best pricing and now the corner coffee shop could be getting a better rate than someone like McDonalds.”
Really, this move is one that’s aimed at satisfying not just home business owners, or large chain customers like Starbucks, but a lot of the small businesses who fall somewhere in between. It’s a brilliant move for Square as it looks to strengthen its position as the mobile payment brand of choice.