Square now offering flat monthly fee option for credit card processing

If you're a small business and you use Square to take payments on your iPhone or iPad, you now have a new option to pay a flat $275 a month as opposed to being charge 2.75% per swipe. Depending on how many credit card sales you process a month, it may be a better deal.

Square's new $275 per month flat fee is good for up to $250,000 in transactions a year and will work on any purchase under $400. If you typically run smaller transactions and do over $10,000 in credit card transactions a month, it's probably a better deal than the standard 2.75% fee per swipe they currently offer.

If you run a transaction that goes over the $400 maximum or you exceed the $250,000 a year limit you'll just be charged the 2.75% per transaction as you already pay now. For some small businesses this may be a good deal but if you process less than $10,000 in sales a month or right around there, you're probably better off being charged per swipe. If you run a card manually you'll still be charged the standard 3.5% fee plus 15 cents but it won't count towards your yearly limit of $250,000.

Square may have been one of the first mobile card payment services to really cater to small businesses but other services such as Intuit GoPayment have quickly caught up and offer rates that are just as competitive. If you already use QuickBooks you can take mobile payments on a pay per swipe rate of 2.7% which is a little less than Square's current single swipe rate. You can also choose to pay $12.95 per month with Intuit and only be charged a 1.7% fee instead. For businesses that run quite a bit less than $10,000 a month in credit card transactions it becomes harder to choose a payment option.

Given Square's recent deal with Starbucks you have to wonder if Square's new flat fee offering is aimed at catering to medium to larger sized businesses. Either way it's nice to see that Square doesn't seem to have any plans to force smaller businesses on pay per month plans.