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Square introduces monthly pricing

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Re: Square introduces monthly pricing

#111

Post by zeroonetwothree »

maxerickson wrote: post #83
majormajor wrote: post #77

Earlier quoted context omitted.

I've never been into getting mileage or whatever, but rewards cards can be very handy. I basically get 1% off of everything I buy -- I've got a card through Amex with no annual fee that simply sends me a $25 gift card in the mail every time I spend $2500. It's basically effortless -- all I have to do is pay with two cards every once in a while after getting the gift card and buying something for more than $25. If the…

The 1% payout you describe seems to be about the max that customers end up with. Maybe some store specific cards are slightly higher, and maybe the right airline miles.

There are several cards that give 2% flat on all purchases. You can also do much better if you use specific categories across multiple cards, for example there are cards that give 5% for restaurants.

Re: Square introduces monthly pricing

#112

Post by ImprovedSilence »

infinite8s wrote: post #103
ImprovedSilence wrote: post #97

Earlier quoted context omitted.

You make good points, I agree with the benefit of cards over cash as well. And who wants to lug around a checkbook when I can just put a small piece of plastic in my wallet? There is definite value in that. Maybe even 3% value. I think CC companies may get the "unpopular incumbent" label because most people are not even aware of how credit cards work, and their costs are often times hidden. I mean hidden in the sense…

Most merchant agreements prohibit offering a discount for cash purchases. Those jewelers who do it are probably betting that they won't get caught and have their CC processing yanked. What this means is that in effect everybody pays slightly higher prices in to cover the fees for accepting credit cards.

Interesting to know, I was not aware of that.

Jewelers are different, they can negotiate price, nobody pays retail at a jewelry store, that gives them flex around these cc agreements you speak of. The other reason jewelers often take cash is they let you off the hook for sales tax, which can be risky for them, yes. The jewelry business is fascinating, and full of "old guard" industry type practices, I didn't get fascinated with it until I started looking into buying a high end watch. But I digress.....

Re: Square introduces monthly pricing

#113

Post by smsm42 »

tibbon wrote: post #65
Unoeufisenough wrote: post #53

Earlier quoted context omitted.

Actually most (depending on the card, the great majority) of those fees end up going right back to the cardholder. Those fees are what pays for all those airline points, cash-back discounts, guarantees and liability protections, purchase insurance etc. Another way of thinking about credit cards is a way that a large groups of customers are able to band together to collectively demand discounts, rewards and other valu…

Very interesting! Perhaps I'm a minority here, but I actually would more prefer just simple cards that are used for payment than a reward-based card (which is why i have a very basic debit card from a credit union). All the airline points and discounts just strike me as marketing more than a real benefit. US Airlines keeps reminding me of the number of points I've forfeited by not using them enough... as if that will…

There are cards that do that - e.g. some of the merchants have store cards that give you immediate discount - e.g. I have one that makes 5% off anything I buy in a particular big store chain. I guess for airlines it is worth it even more since airline tickets cost hundreds of dollars, so if they can avoid paying couple of percents of each transaction to intermediaries by having their own card brand that adds up to serious money, and since they control points program they can give out points so that it's still profitable to them.

Re: Square introduces monthly pricing

#114

Post by abalone »

rexreed wrote: post #106
jsherry wrote: post #102

If a merchant does at least $13,000 per month in credit card revenue, this is a good deal (read on for assumptions). Quick and dirty math here: Stripe charges $275 per month for card revenues up to $21,000 per month. I took a look at http://truecostofcredit.com (courtesy of FeeFighters) and the merchant fees per transaction vary widely based on the type of merchant as well as card type. For the sake of argument, let'…

That's a very narrow window of value. If 10k but less than $13,095 means you're better off with a regular merchant account and > $13,095 but less than $21k means you're better off with the flat rate, then how many firms would really benefit from this? Looks like they should say "if you're doing more than $10k (or $13k if you want to bring in the competition), but less than $21k, take this deal". But of course, no one…

Square has value beyond their rate. They also have an interesting/evolving point-of-sale iPad app, and a groundbreaking wallet app. These could help grow business beyond the shavings of a percent that you'd save playing the processor numbers.

And there's value in a simple rate, too. Yes maybe you could run the numbers and find some scenarios where you'd save elsewhere, but it's a very confusing and somewhat deceptive landscape, and if you get it wrong you might actually end up paying more. There's value in knowing that you're going to get a pretty fair and understandable rate up to at least $250K/yr of revenue.

Re: Square introduces monthly pricing

#115

Post by nnnnnnnn »

rexreed wrote: post #106
jsherry wrote: post #102

If a merchant does at least $13,000 per month in credit card revenue, this is a good deal (read on for assumptions). Quick and dirty math here: Stripe charges $275 per month for card revenues up to $21,000 per month. I took a look at http://truecostofcredit.com (courtesy of FeeFighters) and the merchant fees per transaction vary widely based on the type of merchant as well as card type. For the sake of argument, let'…

That's a very narrow window of value. If 10k but less than $13,095 means you're better off with a regular merchant account and > $13,095 but less than $21k means you're better off with the flat rate, then how many firms would really benefit from this? Looks like they should say "if you're doing more than $10k (or $13k if you want to bring in the competition), but less than $21k, take this deal". But of course, no one…

Not "less than 21k." There is no upper bound on the value. You always save money, provided you process upwards of $10k/mo.

A merchant processing 50k/month on square paying 2.75% would save money by switching to the new plan. At least, if I'm reading this correctly.

Re: Square introduces monthly pricing

#116

Post by ceejayoz »

metellus wrote: post #63
dangrossman wrote: post #51

Earlier quoted context omitted.

Considering the webapp itself doesn't function with JavaScript disabled, that sounds like a feature instead of a bug. It keeps people that will never be their customers out and away from their support queue.

At the very least it should have a message explaining that Stripe requires js.

Stripe?

Re: Square introduces monthly pricing

#117

Post by Iaks »

dangrossman wrote: post #51
Iaks wrote: post #35

In case anyone from square is reading this - you're page loads absolutely 0 content with JS disabled. Just some feedback, take it or leave it.

Considering the webapp itself doesn't function with JavaScript disabled, that sounds like a feature instead of a bug. It keeps people that will never be their customers out and away from their support queue.

I think you are misrepresenting this.

I clicked on a news announcement for a product that I currently know very little about and this will be my first engagement with ANYTHING they have published. Would their impression on me be better if I get a giant white screen, or if I get a note saying that their page requires javascript?

Regardless of my engagement with the product, it is certainly a bad assumption to say that everyone blocking javascript is not a potential customer.

Re: Square introduces monthly pricing

#119

Post by gsibble »

lisper wrote: post #73
gsibble wrote: post #40

Earlier quoted context omitted.

Hi tibbon! To answer 1: Almost all of the fee structure goes to players much higher up the chain than Square. The networks take a chunk, but in fact most of the fee goes to the originating bank (the bank that issued the card). This is a major source of income for most banks these days and can generally be arbitrarily set by them since merchants not only have no other options except cash, but also cannot tell what the…

> would love to share/discuss it with anyone interested. Let me know! How? The "about" field in your profile is blank.

My mistake! I've updated it and my email is my username at gmail.com.

Re: Square introduces monthly pricing

#120

Post by gsibble »

LyndsySimon wrote: post #95
gsibble wrote: post #72

Earlier quoted context omitted.

That's just the news I was hearing from people who have seen their financials. Let's say they aren't operating at a loss though. The processor typically receives 25-50 basis points on a transaction (0.25-0.5%). Let's assume Square is receiving 0.5% and generating revenue from their transactions. At $5B/year in processing volume, that means that Square's revenue is 0.005 * $5B = $25,000,000. $25,000,000 in revenue for…

I have no insight into Square's management or financials, but if I were Jack Dorsey, I would find it reasonable to operate at a moderate loss for a fair amount of time, before launching my own exchange system that bypasses cards completely. Indeed, that seems to be the way they're going, what with _Pay with Square_ allowing for contactless, mobile-based payments. First they disrupt card processing for small merchants…

I agree that may have been a good strategy (and may have been their original strategy) but with $100m in cash from VISA, it's very unlikely they will launch a competing network.

Also, all of Square's payments including digital ones still get processed over VISA/MC/AMEX and still have interchange. Getting rid of the card itself does no good to lower fees.

Prepaid accounts would definitely work though. Again, Square probably isn't interested (and may be prohibited) from competing with VISA/MC though.

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