While leading mobile payment solutions providers like GoPayment and PayAnywhere are earning praise for strengthening America’s small businesses through the availability of affordable platforms, some critics are blasting Square on Monday for not doing the same.
This week, Square confirmed that it is eliminating a monthly flat-fee option for smaller businesses “in favor of its usual per swipe fee.”
According to the Wall Street Journal, beginning in early February 2014, Square will charge merchants 2.75% for every credit card swipe, or 3.5% plus 15 cents, for a “transaction entered manually.”
The change is prompting concern among some of Square’s more than four million customers, which include small businesses that were attracted to Square because it offered a cheaper alternative to traditional credit-card processors, which charge swipe fees of 1.5% to 3%.
“Any business that has a small profit margin, this will hit them really hard,” bemoans Taylor Newnham, owner of Everyday Organic, a small restaurant in Greenville, S.C.
“They’re basically making excuses for changing the payments,” he adds, confirming to the WSJ that he is considering leaving Square for another payment processor.
So, will Square’s decision backfire? It seems as though it already has.
To read the full report from the Wall Street Journal, click here.