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Summary:

Square is leveling the playing field for merchants who take their credit cards over the phone rather than swipe them with Reader. Instead of waiting a month to get paid, they’ll only wait 1-2 days.

Square already has made it simple for businesses to take credit payments while in the field, in the retail shop and in an online store. Now it’s easing the way for its merchants to accept those same payments over the phone.

Square is eliminating holds on funds taken from payments where no physical card is present. Instead of waiting a month to get paid from a manually entered credit card transaction, merchants will get find their money deposited in their accounts in the same one-to-two business days that companies using Square Reader or Stand must wait.

Businesses from flower shops to caterers take down payment info over the phone all the time. While Square allows its merchants to type in credit card numbers into its Register app, there have been limits on how quickly businesses relying on manual entry can access their funds. According to Square, businesses previously received the first $2,000 from card-less transactions in a seven-day period, but had to wait a full 30 days to receive any more.

With the new policy, though, the field is leveled for all Square merchants – they get paid at the same time no matter how they manage the transaction. It’s also another example how Square is branching out from its initial focus on point-of-sale hardware into transactions of any sort.

  1. As the owner of a mother-daughter owned small business, we were introduced to Square early in the game. It offered us an easy and effective way to accept credit cards, and in turn, helped us to grow our business from a home-based one, to a retail location.

    As any small business owner knows, building a business from the ground up is no easy task. Hours upon hours are spent putting every moment and every penny you have to get things up and running, to learn everything you can (many of us are self-taught in many areas), train people, scour for the lowest prices on products (everything from the products we sell to the bags we put them in). Every dollar counts. Planning is important, and research is usually done before making any business changes. A miscalculation on that research or planning can make or break you. We often don’t have a lot of leeway or margin for error, as many of us tend to run a tight financial ship, which is necessary in order for our businesses to survive and grow.

    One of the biggest obstacles for small businesses has been the outrageous credit card processing fees imposed on us. These fees take a huge chunk of what we take in, and, as they are all based on each swipe, businesses that tend to sell products of a lower cost per item, tend to be hit the worst on these fees. As the owner of a gourmet cake ball and cupcake shop, I often would cringe when someone would pull out a credit card to pay for a cupcake or cake ball, thinking about the amount I was going to have to pay in fees for that 1 item, as well as all of the money that went into producing it. Many small businesses simply don’t accept credit cards for purchases under a certain dollar amount, because after you subtracted the fees, it simply did not even pay to sell that item. They are better off not selling it at all. In a day and age where the majority of consumers don’t even carry cash, we are left with either having to take the cards and somehow try to justify the fees elsewhere, or lose the sale completely. Neither has been a good option for small businesses in the past. I actually would get sick to my stomach when I saw the ridiculous fees taken out of our account each month by our credit card processor. Hundreds of dollars each month were going towards simply being able to accept payment. But what other options were out there that worked effectively in a small retail or small business environment that weren’t going to rob us blind with credit card processing fees? Pretty much none….and then came Square.

    Square introduced the monthly flat-rate pricing option back in 2012. I kept going back to them and watching for what advances they were making, to see if they were going to come out with an option that was better than the little phone reader, that worked a bit better in an actual brick-and-mortar location with higher volume, but lower priced goods. The flat rate option seemed like a dream come true for small businesses. FINALLY, it seemed that a company “got it.” Square seemed to actually understand the needs of a small businesses! I researched this option and read all of the fine print. I also researched competitors to see if there were any similar options available. When I went back though several months of my credit card statements, and compared the fees I was paying, to what they would be if I made the switch to processing with Square, I would have been crazy NOT to switch. I would have been saving thousands of dollars a year by going to this flat-rate fee. Never had I even paid anywhere near $275 a month (in fact, I often paid double or triple that amount) in processing fees. But-I wasn’t sold on the platform of using the delicate little swipe in my store, especially during high-volume periods. I didn’t want to hand an ipad or phone back and forth between my customers to “sign” it, when there was a line of customers. It just didn’t offer a solution for me to be able to switch to that plan…so I kept watching and waiting…waiting for them to think of a solution for businesses like mine and be able to get in on this flat-rate option.

    It seemed like the gates of financial heaven opened up when they debuted their Square Register Stand system earlier this year. I, like so many other small businesses, were in awe of the sleek design, the free register app, the ability to operate like a POS system, but on an affordable scale. We watched their commercial on the website showing small businesses throwing out their old credit card processors, and using their old registers for storage as they switched out their outdated systems that were costing them a ton of money, to the new, sleek Square Stand. How easy it would now be to accept credit cards, put in orders, and keep track of business. The best part-for those of us that had not already made the switch to monthly pricing beforehand, for reasons previously mentioned, this was THE thing we had been waiting for.

    I figured the cost of what the total new system would cost. For most people, we are talking right around $1,000.00 or so to get started (iPad, cash drawer, printers, Square stand, etc.). Not a huge chunk of change, but still a significant investment for a small business. $1,000.00, as many of us know, goes a very long way, and it’s not just paid into something without knowing what we are getting out of it. What were we getting? A promise. A promise from Jack Dorsey and Square. A company that was built on the backs (and blood, sweat, and tears) of small business owners and stood by us. A company that seemed to really understand us, and was delivering a product and credit card processing service tailored to our needs, to help us to grow and thrive in the dog-eat-dog business world. We trusted them. We loved them. We told everyone about them.

    I, like so many other small business owners, knew this was just what we were looking for. I pre-ordered the system (even though later, I found that I actually could have purchased it at Best Buy earlier than I even received my pre-order), bought all of the components (over a period of a few months-again, this was a significant investment), and made the switch to Square. I signed up for the flat rate fee of $275. I should note that I still have to pay my old credit card processor a $30 a month fee for another year due to being in contract-but even with that fee, I was still going to be saving money…that is, once the system was “paid off” in a sense. You figure that the money you are saving each month by using the flat-rate plan, pretty much goes into the cost of the system, and after a few months, we would be reaping the benefits of our amazing pricing plan, and seeing where it could take us.

    In the meantime, I sung the praises of Square to any small businesses owner that would listen. Customers who owned businesses were so impressed by our new system, and I would do whatever I could to tell them about how much we loved it, and what a difference it had and was going to make for our store. Other businesses would contact us online, and ask what we thought so far of Square and the new system. Every time, I told them nothing but good things about this company. I posted pictures of our shop on the Square Facebook page, showing how great it looked, and tell them how much we loved it. We were in love with Square.

    But alas, every good love affair must come to an end. Usually, the facade of one partner in the relationship is exposed for all of the ugliness that it truly is, and then, often without warning, seemingly in the blink of an eye, it’s over.That end came on Friday, November 8, when I, along with thousands of Square merchants across the country, received an email from our beloved Square, notifying us that they would be discontinuing their flat-rate monthly pricing plan, and that I should look forward to the new options they were hard at work on for larger companies. Really? Why would we be excited about what options they were working on for larger companies? Aren’t mostly all of Square’s current customers SMALL businesses? Wait, come to think of it, Square wouldn’t even EXIST if it wasn’t for the small businesses that used their services-and now, they were turning their backs on us?

    Why, Square? What happened to that trust we had? What happened to the company that was designed for the “little guys”? What happened to the promise of heaven-sent processing fees so that we had a chance? Was it corporate greed? Did you make a mistake? Do you just not love and care about us anymore?

    The thing that makes this worse, besides the fact that they seemingly knew all along that this is how things would go, is the precise, underhanded timing of it all. Debut the flat-rate pricing…bring out the shiny new register stand several months later…get people to make the switch and break contracts with credit card processors and switch to Square, wait for people to train and fully implement the new systems in their businesses, and be sure the businesses are fully invested….and then-WHAM-you pull the rug out from underneath them and turn your backs on them. You lured us all in, and slapped us in the face.

    When you notified us of this, you did it via an email, which some merchants never even received, on a Friday afternoon of a holiday weekend-knowing full well that many people were gone for the weekend, and that they would likely not even get to the email until some point the following week-if they got to it at all. Perfect timing, don’t you think? If this was such a great thing that we should all be excited for, why not announce it loud and proud on your Twitter and Facebook pages? Tell us all about how great it’s going to be, and what features you are working on that are designed for larger businesses that aren’t even your current customers! Come on! We’re all waiting!

    But instead, you shrunk back in the corner like a bunch of cowards. You slyly sent out an email to current customers, refused to address Twitter and Facebook noise about the matter. You took down the ability to post on your Facebook page and completely removed posts on Twitter. You failed to respond to messages and emails from your customers, casting us aside like yesterday’s trash. I guess you thought we wouldn’t notice, am I right?

    Wrong. We noticed, and we want answers. If you made a planning mistake, own up to it, chalk it up as a loss, keep your promise to your current customers that have stuck by you and gotten you to where you are today, and move forward. This isn’t a few dollars here and there that you are messing with-it is thousands of dollars, that will affect thousands of small businesses-and it seems you planned it this way all along, from the very beginning, watching as we trusted and believed in you, and then executing your dirty little plan for your customers to pay for your mistakes. Apologize. Suck it up. Move forward. Many of us merchants will look at it as a huge argument we had, and might be willing to stick it out. For others, they have also seen your true colors, and have already broken up with you for good. You have a chance to do the right, and ethical thing, and stand by the foundation that the company was built on.

    This news breakthrough in this article hardly compares to the losses that Square will create if they follow through with their plan to eliminate the flat-rate fees. Great for those that take phone orders, but let’s address the real issue that Square is refusing to address or respond to. How about writing an article about that?

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  2. I never had that problem I receive the money in my account the next business day if I swipe or enter manually been using square
    for 2 years

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  3. I had a transaction declined by square of only $5000. After providing them with the docs necessary, they told me to refund client because they can not deposit the money. That matches really well with the new policy eh?!!

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