Square’s Rate Hike: What Will it Cost Your Business?
Now more than ever, every dollar matters. Whether you run a retail shop, food truck, or e-commerce store, payment processing fees directly impact your bottom line. That’s why Square’s latest fee increase is a serious concern for businesses already operating on tight margins. If you rely on Square to accept payments, are you paying more than I should? The answer is probably yes.
“Square’s fee increase is yet another example of big payment processors cutting deeper into small businesses’ cash flow. Every dollar matters, and these added costs reduce margins, making it harder for businesses to reinvest in growth, hire staff, or improve their operations. Businesses shouldn’t have to absorb the burden of higher fees just to process payments—it’s unfair and avoidable.”
The Cost of Square’s New Fees
Square has increased its in-person transaction fee from 2.6% + 10¢ to 2.6% + 15¢ per transaction.
It’s tricky right? At first, $0.05 cents may not seem like much, but those pennies add up fast—especially for businesses with high transaction volumes.
What This Means for Your Business
1,000 transactions per month = +$50 per month ($600 per year)
3,000 transactions per month = +$150 per month ($1,800 per year)
5,000 transactions per month = +$250 per month ($3,000 per year)
Other Square Fees You Should Know About:
Online payments: 2.9% + 30¢ per transaction
Manually entered card payments: 3.5% + 15¢ per transaction
Invoices: 3.3% + 30¢ per transaction
How Does This Affect a Business?
To show how these fee increases affect real businesses, let’s look at your favorite food truck. This food truck earns $300,000 per year, with an average sale of $15 per order. This equates to:
Total transactions per year: 20,000
Before Square’s increase: $2,000 in annual per-transaction fees
After Square’s increase: $3,000 in annual per-transaction fees
Total extra cost: +$1,000 per year
Imagine what that extra $1,000 could do for that food truck business:
Upgrade equipment for faster service
Invest in marketing to attract new customers
Hire extra staff to improve operations
Keep more customers and annual sales during hardship by passing a little less burden onto your customer
Improve your profit
Instead, that money is going straight to Square.
“For many businesses, especially those with high transaction volumes, even small fee increases add up to thousands in extra expenses each year. These costs directly impact cash flow, limiting a business’s ability to expand, invest in marketing, or improve customer experience. Instead of businesses growing, Square’s increasing fees force them to simply survive.”
Why You Should Rethink Square
At first glance, Square’s pricing may seem reasonable—but compared to other merchant providers, businesses often pay more than necessary.
Here’s why:
Higher Fees Over Time – Square has a history of raising rates. Who’s to say they won’t do it again?
Risk of Account Holds & Freezes – Square can suspend or terminate your account without warning, holding your funds for weeks or months.
Lack of Personalized Support – If you have issues, you’re stuck with automated support instead of real help.
One-Size-Fits-All Pricing – Unlike custom merchant accounts, Square’s fixed rates mean you could be overpaying.
Todd’s Take:
"Square is great for startups that need quick, simple payment solutions, but as businesses grow, its fees become a serious burden. Businesses processing over $20K monthly could save significantly by switching to a custom merchant solution like PayStream, where rates are optimized, and customer support is personalized."
There Are Alternatives Worth Exploring
The good news? You don’t have to settle for higher fees and unreliable service. There are many different options that may better suit your business that will help you increase your bottom line. There are also many different service providers for you to choose from and we all offer different perspectives and services. Look for Merchant Service Consultants (like PayStream) will provide best recommendations suited for your business vs. agents who are incentivized with commissions.
Why Businesses Choose PayStream
✅ Lower, customized rates based on your specific business needs
✅ No hidden fees or surprise rate hikes, No Contracts
✅ Real human support—no automated systems
✅ Secure, reliable payments with no risk of frozen funds
✅ Scalable solutions that grow with your business
As a business owner, you work too hard to give away your profits to rising payment processing fees that suit the needs of big business. Instead of absorbing higher costs and raising prices so high you lose customers, now is the time to look into alternatives and switch to a better solution.
Get a free, no obligation, savings analysis today and see what PayStream can do for you.