Square launched a flat-rate monthly fee today for small-business owners, turning the credit card industry on its head again.
Merchants who process up to $250,000 in customer payments per year using the card reader can pay a monthly rate of $275, instead of 2.75 percent per swipe, according to a press release from Square. The monthly fee includes the usual Square perks -- no additional fees and no contract.
Square -- known for its small, square card reader that can be plugged into mobile devices to create an instant credit card machine -- said it is "leveling the playing field," since these types of discounts are usually reserved for bigger companies processing higher volumes.
"For 62 years, merchants have suffered complicated, expensive processing fees. Square is the first company to rethink electronic payment pricing with the merchant in mind. We are giving merchants affordable, predictable pricing, " Square CEO and co-founder Jack Dorsey said in a statement. "With one monthly price, merchants know that the sales they've processed in a day is the same amount deposited in the bank."
This nod to the little guys who made Square a success comes as Square makes its foray into the mainstream. The company recently formed a partnership with Starbucks that included a $25 million investment from the coffee corporation.
This new payment option probably won't benefit Starbucks if customers at the coffeehouse giant's many stores take to the card reader's services, which include an app that lets customers make a purchase without taking out their wallets.