Comment by sown | Hacker News Reader

Comment by sown | Hacker News Reader

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My family has owned small businesses before and one of the more annoying parts is dealing with the credit card machine and merchant vendors. The rates were always high, the machines were kind of confusing to use and were expensive. The deposits might take a little while. A minor point for the younger people in the family running a business was that they weren't very trendy or hip looking, either.

Small business owners have little of either time or money. Anything you can do to improve that is appreciated. Although SBUX is much larger than the family owned businesses I'm familiar with, I'm sure they appreciate it, too.

We've only owned 1 restaurant and if we were high volume enough, being able to carry the register over to the table and have customers pay right away would have been useful.

If I'm reading Square's website correctly, there's a minimum $1 transaction? Our shoe store in 1990 probably wouldn't have cared. Our coffee shop today would care, though.

Is Starbucks going to stop accepting credit cards? Adding less confusing new machines to the confusing old machines does not result in less average confusion.

[sorry, that was retarded, I confused square with a different payment system. disregard.]

Starbucks will still be accepting credit cards, cash, and now even Pay with Square tabs!

No. Square's product is all about accepting credit cards. From the press release:

"Square will process Starbucks U.S. credit and debit card transactions, which will significantly expand Square’s scale and accelerate the benefits to businesses on the Square platform, especially small businesses, while reducing Starbucks payment processing costs"

https://squareup.com/news/releases/2012/square-starbucks

The Square Register product takes plastic as well as letting people pay via the geo-fencing Pay with Square app.

But square collects 3%, which is much higher than most merchant accounts.

Really? Maybe for a merchant on Starbuck's level, but for small merchants, cc processors definitely charge more than 2.75%. Even if you get a lower percentage rate (impossible) you get charged 0.05 or more per transaction, plus a monthly service fee + monthly equipment fee, etc. Square is definitely a cheaper option.

card present business (like your local coffee shop) pays less than 2% and their monthly fees are also lower. 2.75% range is usually for online businesses (card not present).

I might be wrong but I am under the impression Starbucks runs their transactions as card not present, at least in Canada and I'd suspect also the U.S. This allows them to swipe-and-done a credit card without requiring a signature or chip verification.

The act of swiping your card demonstrates its presence. The fact that there is no signature or PIN requirement is a result of the type of business that Starbucks is (Mechant Classification Code), and the typically low transaction amount.

This thread is full of misconceptions about payment processing which appear to be simple assumptions stated as facts. Having worked for one of the largest merchant acquirers in the world, it reminds me of glad I am not deal with any of that any longer.

Thanks for the information! Is there data on the magnetic strip that wouldn't be provided in a card-not-present transaction, or do the processors take the machines' word that the card was present?

It's very rare for a brick and motar merchant to pay more than 2% processing fee. 2.75% is the high end for ecommerce accounts.

Citation? https://squareup.com says the fee is 2.75%.

And isn't it also possible they gave Starbucks a special deal considering the marketability and value of a deal like this?

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