Square, who has changed the format of mobile payments, has announced a new pricing format that big business will benefit from. Now, instead of having to pay 2.75% per transaction, a company can opt to pay a monthly fee of $275. This will save any company significant money that makes over 10,000 transactions per month. Jack Dorsey, the CEO of Square, says, “it is all part of a move to make it easier for consumers and merchants to move away from cash.” Dorsey hopes that this new pricing method will make it more approachable to businesses and business owners.
The article includes a Q&A with CEO Jack Dorsey and below are some highlights from the interview:
You are offering fixed pricing to merchants. Why?
If you look at the history of the industry, 1950 was first time that a merchant was charged to accept a credit card. It was 7% per transaction for Diners Club. And that per-transaction fee has not been changed in 62 years, it has not been rethought as a model. Two hundred and seventy-five dollars a month and zero fees is something entirely new. The reason we are doing it, is to make it more approachable. When a merchant has to pay credit card fees, they often don’t know how much it’s going to be.
But your previous pricing plan of 2.75% per transaction was already pretty transparent.
Yes, you know exactly what you are paying. But you still have to calculate that. [Now] you pay $275 per month and everything you swipe is in your bank account the next day.
So this represents a shift, if not of your goal of serving both sides of counter with new technology, but at least in focus for Square?
No. It’s always been merchant based. Small merchants self selected into it. You can imagine many, many retailers enabling Pay with Square.
Are you building a sales force to go after larger retailers?
No. I talk to them to them. But I’m not going out and doing a tour [of major retailers].