Up to $400 per any single transaction and up to $250,000 in total transactions per year—or approximately $21,000 per month. Swiped transactions over these limits simply cost 2.75% per swipe.
$21,000 * .0275 = $577.5 in fees.
I would love to see more Square adoption. In Charleston, lots of cart vendors (hot dogs, popsicles) use Square, as well as many vendors at the farmers market.
It's a nice idea, though I don't know how many companies are in the $10k-$21k/month revenue bucket that would see a benefit. All companies processing over $250k per year can save a max of $300 per month by signing up to the fixed rate plan and then paying the normal fee thereafter.
The new fee band gives savings to those processing more than ~$10k/month, but provides no savings for smaller users.
This is a great deal for any company making more than $10k a day, or about $500 assuming 20 working days a month. It's starting to sound like a decent deal that should appeal to a lot of small businesses.
I think what this does is retain existing Square merchants a bit longer -- ones who grew from $0 to $8k or so, are now evaluating real merchant accounts. Inertia, other advantages of Square (PWS), etc. might keep those merchants another year or two, getting them up to around $20k/mo revenue, and then Square might come out with something new for them (a Square-specific payment instrument? Pre-loaded cards using ACH per merchant or across Square with 0% fee?)
In college, I financed a spring break trip with credit card points by buying US Savings bonds on a credit card. The US treasury quickly wised up and realized selling bonds without charging a credit card fee was stupid. Even the US treasury got caught up in the first internet craze.
Deal gets worse for the business the further your revenues are from the $250K limit.
Definitely a big deal though.
I'm guessing they were having issues with adoption in that sector so they rolled this out to make it a little tastier.
They probably have the best penetration in the under $120k/year sector, because of the ease of setup, low overhead, no monthly fees, etc.
I have a good friend who runs a small shop (> $50k/year) and she loves square. Got them up and running painlessly, their iPad is their cash register / POS system, and she pays a manageable amount to Square for it. She keeps asking me when Square is going to start doing online payments, because their transactions tend to be small online PayPal's 2.9% + 30¢ is painful in comparison.