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

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45 REPLIES 45

When I signed up I was told that I would receive the first $1000 of recripts free of your fees....and so would someone else I invited to join. I have an interest person.

I read somewhere that the feed would be reversed at some point for the $1000 in sales. How does that work?

Marvella McPartland

Heart of the Matter, Hypnosis & Coaching

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Admin

@MarvellaM

 

If you contact our Customer Success department we can look into this a bit further for you. Usually you'll need the information on the business who referred you, and you'll have a referral link that you want to provide to the business who would like to sign up.

 

When they sign up and open an account it will put a processing credit on the account. If they have already signed up and you didn't receive this, that is something Customer Success will be able to help you with directly.

kellyj
Technical Program Manager: AI
Square Inc
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We have alot of phone orders which way is the cheapest for me to enter their card info.  I have credit card terminal, virtual terminal, or pos system?

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Square Community Moderator

Hi @rzrshop!
 

I moved your post to a relevant thread in the Community around manually entering cards.

 

The fee for manually entering cards is the same fee all around. See KPay's fee links for more information.

Ashley C
Community Moderator, Square
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