Skip to content
  • Merchant Accounts
    • High Risk Merchant Account
    • High Risk Payment Gateway
    • High-Risk ACH Processing
    • High Risk Credit Card Processing
  • Industries
    • Adult Merchant Account
    • Bad credit Merchant Account
    • CBD Merchant Account
    • Continuity Subscription Merchant Account
    • High Volume Merchant Account
    • eCigarette and Vape Merchant Account
    • eCommerce Merchant Account
      • Accept Credit Card Payments Via Your Own eCommerce Website
      • How to Accept Credit Card Payments Via Online Gateways
      • Accept Over-the-Phone Credit Card Payments
      • Accept Credit Card Payments On Mobile
      • Accept Credit Card Payments In-store
    • Travel Merchant Account
    • Startup Merchant Account
    • All Merchant Accounts
  • Expertise
    • Chargeback Prevention Program
    • High Risk Merchant Account Instant Approval
    • About us
  • Rates & Fees
  • Contact Us
Menu
  • Merchant Accounts
    • High Risk Merchant Account
    • High Risk Payment Gateway
    • High-Risk ACH Processing
    • High Risk Credit Card Processing
  • Industries
    • Adult Merchant Account
    • Bad credit Merchant Account
    • CBD Merchant Account
    • Continuity Subscription Merchant Account
    • High Volume Merchant Account
    • eCigarette and Vape Merchant Account
    • eCommerce Merchant Account
      • Accept Credit Card Payments Via Your Own eCommerce Website
      • How to Accept Credit Card Payments Via Online Gateways
      • Accept Over-the-Phone Credit Card Payments
      • Accept Credit Card Payments On Mobile
      • Accept Credit Card Payments In-store
    • Travel Merchant Account
    • Startup Merchant Account
    • All Merchant Accounts
  • Expertise
    • Chargeback Prevention Program
    • High Risk Merchant Account Instant Approval
    • About us
  • Rates & Fees
  • Contact Us
(800) 956-1277
Apply Today
HighRiskPay.com
  • Merchant Accounts
    • High Risk Merchant Account
    • High Risk Payment Gateway
    • High-Risk ACH Processing
    • High Risk Credit Card Processing
  • Industries
    • Adult Merchant Account
    • Bad credit Merchant Account
    • CBD Merchant Account
    • Continuity Subscription Merchant Account
    • High Volume Merchant Account
    • eCigarette and Vape Merchant Account
    • eCommerce Merchant Account
      • Accept Credit Card Payments Via Your Own eCommerce Website
      • How to Accept Credit Card Payments Via Online Gateways
      • Accept Over-the-Phone Credit Card Payments
      • Accept Credit Card Payments On Mobile
      • Accept Credit Card Payments In-store
    • Travel Merchant Account
    • Startup Merchant Account
    • All Merchant Accounts
  • Expertise
    • Chargeback Prevention Program
    • High Risk Merchant Account Instant Approval
    • About us
  • Rates & Fees
  • Contact Us
back to all

Merchant Accounts vs. Square: The Showdown

  • June 9, 2016
Merchant Accounts vs. Square- The Showdown

Since its introduction in 2009, Square has become a prominent player in the payment processing industry. With the introduction of this new model of accepting payments, however, questions have arisen over whether — and when — Square is truly a superior choice to a traditional merchant account.

In this article, we’re going to take a deep dive into the two options to discuss their merits, drawbacks, and which is best choice in which situation.

Setup and Simplicity

Merchant Accounts vs. Square- The Showdown

Image via Flickr by frankieleon

Square Inc. wasn’t the first company to introduce a pay-as-you-go processing, but it is certainly the most successful. By pairing up with smartphone or tablet devices and providing the card-swipe attachment with your account setup, Square made an argument for simplicity. This has been especially helpful for startups that were overwhelmed by the options presented by merchant accounts.

The apparent complexity of merchant accounts may stem primarily from the number of choices available on the market today and the full range of plans available to suit different business needs. Merchant accounts typically also have long-term contracts (although they have become more flexible in recent years) and monthly fees. Learn more about high risk merchant account services.

Fees and Transaction Limits

Square’s philosophy of simplicity extends into its cost structure, which it sets at a flat 2.75 percent or 3.5 percent plus $0.15 for “card not present” purchases. By default, Square accepts all major credit cards in the United States, and the rates remain the same regardless of the card used. The major limitation is the weekly limit of $1,000 for “card not present” transactions.

Merchant accounts offer a variety of fee structures, and some of them are “tiered” — with various types of operations incurring different charges. These fee structures can get somewhat complicated, though it’s worth noting that the variety of options they offer are meant to suit the needs of different business types. However, at the simplest level, you can expect fees to start at around 1.5 percent plus $0.10 per transaction. Some card types have higher costs, while the fees for debit transactions are substantially lower.

Other Factors

Square’s reputation for customer support was weaker in its early years when the company relied heavily on online support forums and had limited phone support available. More recently, live phone support has become available, and the company’s reputation has improved. Merchant accounts, meanwhile, have various support packages but tend to have a phone and online support available, with many companies offering 24-hour availability.

Square’s simplicity can sometimes be a curse when its options and limitations contradict business needs; while a few alternate payment models are available, the options are substantially less diverse than those available through merchant account companies. Merchant account companies also cover special situations such as high-risk merchant accounts for bad credit, large volumes of online transactions, and much more.

When Each Option Is Best

While Square’s market share is difficult to determine, it’s certainly true that the company — not to mention similar businesses that have copied its business model — is a prominent choice in the market today. There are valid reasons to choose Square, especially in the early days of starting a venture. Its deployment time and the simplicity of its structure and hardware can get companies moving quickly, while its lack of monthly fees or contracts can save money and hassle.

Additionally, the lack of monthly fees fully counterbalances the higher transaction fee for companies with monthly sales totaling less than $1,000. The flat rate also means that businesses that have very low dollar values for each operation (for example, food vendors) may benefit even with higher volumes of transactions.

The dilemma arises because many startups choose Square due to its simplicity but fail to update to a more cost-effective service once they’ve outgrown the early stages of their business. So what point is right for that transition?

For companies with between $1,000 and $4,000 in monthly transactions, it’s important to ask follow-up questions. For businesses with a large volume of low-dollar transactions, Square may still be best while companies seeing a significant number of debit card transactions will certainly benefit from using a merchant account. And once monthly sales exceed $4,000, the savings provided by a merchant account are impossible to ignore. Any company experiencing or projecting this volume should shy away from Square’s higher transaction fees.

Ultimately, merchant accounts and Square serve very different audiences. While Square does an excellent job of helping startups with small monthly sales, merchant accounts offer lower costs and more comprehensive solutions for established businesses.

Previous Article
Next Article

We Can Get You Approved!

Having trouble getting approved for your high risk merchant account? Did you know HighRiskPay approves 99% of all applicants!
Sign Up for Free

Related Articles

High risk Merchant Account

High Risk Payment Gateways

October 28, 2021
High risk Merchant Account

There are Advantages for Being a High-Risk Merchant Account

October 28, 2021
High risk Merchant Account

High Risk Payment Gateways and the Impact of Transaction Risk to Merchants

October 28, 2021

HighRiskPay.com is one of the leading High Risk Merchant Account providers of credit card processing & payment gateways to businesses with bad credit.

Twitter Facebook-f

CONTACT INFO

  • (800) 956-1277
  • sales@highriskpay.com
  • highriskpay.com
  • 27702 Crown Valley Pkwy Suite D4-120, Ladera Ranch California 92694, USA

QUICK LINKS

  • Rates & Fees
  • FAQ
  • Contact Us
  • Blog
  • Affiliates & Resellers
Copyright © 2021. High Risk Pay | Privacy Policy
  • Merchant Accounts
    • High Risk Merchant Account
    • High Risk Payment Gateway
    • High-Risk ACH Processing
    • High Risk Credit Card Processing
  • Industries
    • Adult Merchant Account
    • Bad credit Merchant Account
    • CBD Merchant Account
    • Continuity Subscription Merchant Account
    • High Volume Merchant Account
    • eCigarette and Vape Merchant Account
    • eCommerce Merchant Account
      • Accept Credit Card Payments Via Your Own eCommerce Website
      • How to Accept Credit Card Payments Via Online Gateways
      • Accept Over-the-Phone Credit Card Payments
      • Accept Credit Card Payments On Mobile
      • Accept Credit Card Payments In-store
    • Travel Merchant Account
    • Startup Merchant Account
    • All Merchant Accounts
  • Expertise
    • Chargeback Prevention Program
    • High Risk Merchant Account Instant Approval
    • About us
  • Rates & Fees
  • Contact Us