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Why are fees higher for manually-entered transactions?

One of the most important things to know when getting started with your credit card processor is what you’ll be charged. I don’t blame you, you deserve to get the best deal in town! When you take your first payment without using a reader or the Square Stand, this higher fee of 3.5% + 15 cents may cause some confusion. The last thing we want is for you to be confused – which is why we’re explaining Square’s fee structure, and getting into the nitty-gritty details to clarify why the fee is higher for manually-entered transactions. Let’s get started.

 

What are Square’s fees?
For manually keyed-in transactions, fees are 3.5% + 15 cents. Some sellers who have spoken to our Sales team have custom pricing, but our standard pricing applies to most sellers.

 

 

Why the higher fee for manually-entered transactions? 

The short answer: manually-entered, keyed-in transactions are at higher risk than swiped transactions. Therefore, credit card providers charge Square more in order to protect against fraud.

 

If you swipe or dip a credit card, the cardholder is assumed to be standing in front of you, and you can easily verify their identity by asking to see their ID and checking their signature. With manually-entered transactions, you could be entering the card information over the phone or Internet, making it harder to verify that you’re accepting payment from the owner of the card. This riskier situation makes credit card networks nervous, so they put measures in place to protect against such transactions, including higher fees.

 

Let’s cover what goes into that 3.5% + 15 cent fee:

  1. Fees from credit card networks - These fees are set by credit card networks and vary by card brand. The four main card networks are Visa, Mastercard, Discover, and AmEx. These networks charge Square a set amount to process payments through their channels. For more information about network fees, you can take a look at Square’s payment terms available here: Square Payment Terms.
  2. Processor fees - This is the fee Square charges for the services we provide you, including connecting you to the credit card networks. We do our best to keep this low so that we can pass along savings to you. For a comprehensive look at how this plays out with Square's fees, have a look here: Understanding Our Fees | Square PaymentsOr this informative video below the graph!

    Data in figure based on illustrative exampleData in figure based on illustrative example

 

From your Square Dashboard you can always check your recent deposits and get a clear outline of the fees included for the transactions associated with your deposit.

 

I know this is a complicated topic, but hopefully this helps you better understand why Square charges more for manually-entered payments. Let me know if you have questions or if I can help clarify any other part of our pricing structure.

[This post was edited by a moderator on August 26, 2020 to include an infographic and offer more visibility into Square's pricing.]

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Best Answer

Thanks for sharing, @Kpay. It's really cool to hear more about the nuts and bolts/ behind the scenes! 

View Best Answer >

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45 REPLIES 45
Super Seller

@jennrawlings, what reader do you have?  What phone do you have? What version of the OS and Square app are you running?

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I have the small reader that just swipes cards. I have an android phone, Samsung Galaxy 6. I am running the latest version of Square.

Thank you for looking into this for me!

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Super Seller

That phone is compatible with the Square magnetic swipe reader.  when you are in the square app do you see a popup with a reader connected image like in the pic below?  most of the time the issue is that the reader isn't plugged all the way in like a case is stopping it.  It may seem like it is in all the way but needs just a tiny bit more.

 

Square-chip-card-emv-reader-connects.jpg

 

 

 

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I removed the Otter box and pushed the reader in until I heard a click and then I pushed it a bit more. It still will not read a card. Suggestions?

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Alumni

@jennrawlings, sorry, looks like your last message got lost and didn't get a response yet. 😕

 

Can you give our support team a call to troubleshoot your reader? You may also just want to try a new reader, which you can order from your Square dashboard.   

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I have just switched from a regular credit card company to square. When I was with the creidt card company I had to be PCI compliant each year or face hefty fees for not doing so. I haven't seen anywhere with square that it is necessary to do. Can you clarify that for me? Do we or do we not need to be PCI compliant?

Thanks

Gayle

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Super Seller

the PCI compliance is done by Square and costs you nothing extra.

 

you should still follow the guidelines for proper handling of credit cards and personal information.

 

https://squareup.com/guides/pci-compliance

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i cant get the cards swiped ????? please show or explain the "exact" procedure for taking a card !

thankyou

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Alumni

Hi @sherri-1 - What type of card reader are you using?

 

Here are a few FAQs and troubleshooting:

 

Chip & Contactless Reader Set up: https://squareup.com/help/us/en/article/5639

Troubleshooting: https://squareup.com/help/us/en/article/5673

 

 

Mapstripe Reader Set up: https://squareup.com/help/us/en/article/5174

Troubleshooting: https://squareup.com/help/us/en/article/5412

 

Let us know if you still need help!

 

 

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In some cases a cell phone is unavailbale. Can you use the virtual terminal and a insert card reader into the laptop? If not, please provide other options. Thank you!

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Alumni

Hi @Sharonda - With virtual terminal, you just key in payments to your computer. Learn more about it here: https://squareup.com/help/us/en/article/5807-get-started-with-virtual-terminal

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Question, is a stored credit card that I run a transaction on considered a keyed in transaction and at the 3.5% + .15 cents?

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Super Seller

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I have a card reader that I acquired somehow in the past, so I thought I would try to use it while waiting for the official one to arrive in the mail.  It wouldn't work.  I just got no response whatsoever.  Is that because it isn't a special one assigned to me or did I do something wrong?

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Super Seller

one of the first things I'm thinking is if you don't know how you got it or where it was is that it is the old style that doesn't work anymore.  for the first few years, they had one that they stopped supporting due to newer encryption.

 

Nothing is tied to an account from a reader they are just "dumb devices" that are only tied to whatever account the app is logged into.

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I was charged the manual fees on my trial when I swiped my card. Never entered my credit card number. Why was this?

 

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Admin

@Skn I'm very sorry for the delay in this reply!

 

If you received free processing as part of Square's Referral Program the per transaction fee is still assessed when you swipe a card - but the fee is then credited back to you before funds are deposited to your bank account. There's information about how to confirm your reimbursed processing fees in this Support Center article. 

️ Helen
Seller Community Manager

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Hi I was at an event yesterday and many cars transactions took place, a lot of cards when swiped through the reader just wouldn’t register any activity n customers get nervous when u swipe multiple times thinking they wl be charged multiple times

so I ended up manually entering their info-heartbreaking to know I have to pay extra for that! I have a brand new reader so I’m just perplexed it did that but I lost in the bargain 😥

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Admin

Thanks for your post @QCK, I'm sorry to hear about the trouble you had using the reader at your event! These magstripe reader troubleshooting steps should help but if the reader still isn't working go ahead and call our CS team so they can see what the issue might be.

️ Helen
Seller Community Manager

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The problem I have is that I have to remove the protective case on my phone to make the square card reader work, because the plug is too short. Removing the case is difficult, time consuming, and not worth it if I have one or two sales here and there.  Therefore I have to input things manually, even with the customer standing there. This problem could easily be solved by putting a longer plug on the reader.

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Super Seller

you can buy extensions aftermarket that make the cord a couple of inches longer.  Square can't really make the headphone jack longer because if they did it would be sticking out that much farther on phones without cases causing many to be broken off or worse damaging the port.

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