Should I Use Square or get A Merchant Account?
by Chris Judy
You might be in a position right now to look for credit card processing for your new or existing business. In looking, I am sure you came across Square merchant services. They offer credit card processing at a wholesale rate (one flat rate for all card types). This can be appealing for a new business owner looking for credit card processing for the first time. Let see if Square merchant services right for your business. If the following statements fit your situation, then a credit card processing service such as Square is right for you.
- I am just starting, and I do not know how many credit cards I will process, if any at all.
- My sales are on the low end as I never process much more than $1,000 a month.
- My average credit card sale is tiny, often less than a few dollars.
If any of these statements fit your current situation, you should set up with Square merchant services or a similar program. Let’s look at why.
The first statement explains a situation where new or existing business is just starting to think about credit card processing and may not be sure if they will process at all. In this case, processing your credit cards with a wholesale processor like Square has to offer would be best until you gauge how many cards you will be processing. We do offer a similar set-up with our PayAnywhere Bluetooth solution that you could also consider.
In the next situation, your processing is very low. With having your own merchant account to handle the processing of credit cards, you would incur a monthly cost. What it comes down to is if the monthly costs outweigh the savings, you would be better off with a solution like Square merchant services.
The final statement I put forth looks at the size of the transaction. If your average sale is tiny, then the per-item fees would be substantial. In this case, using Square could actually cost them money since processors all pay the same costs to Visa, MasterCard, and Discover. For example, a debit card cost is $0.22 per transaction. At a $5 sale, the $0.22would equate to a 4.4% by itself. Square has recently added a $0.10 transaction fee with their processing, but they will still beat any pricing out there in the case of a very small ticket.
Okay, now, if you are currently processing credit cards or looking to add credit as a payment option and none of the situations mentioned above apply in your case, you would be best off with your own merchant account to handle your credit card sales. If you like the idea of a fixed rate to process your cards, we can help you with that too.
Total Merchant Services offers a solution similar to Square without the high overall percentage called PayAnywhere. We also offer several other wireless options that include receipt printing. Total Merchant Services offers the best wireless processing terminal free to your business simply due to wanting to earn and keep your business.