In the last episode, I began a discussion about how to compete against Square by focusing on their weaknesses There are two specific...
What the Square Price Increase Means for ISOs and Agents
Two misconceptions about Square are paralyzing our industry! Get rid of the wrong viewpoint and seize the opportunity to compete with Square on a level playing field. I just completed two episodes about competing with Square. I finished creating those episodes just before the Square price increase! Today I want to answer three […]
Two misconceptions about Square are paralyzing our industry! Get rid of the wrong viewpoint and seize the opportunity to compete with Square on a level playing field.
What is the Square price increase?
Square began with a 2.75% flat-rate processing platform. There were no other fees attached at all – no per-item fees, no monthly fees, no annual fees -nothing! Only 2.75%.
Square got tired of losing money. Go to squareup.com/pricing to see the current pricing. The flat-rate 2.75% is no more!
What does their price increase mean in our industry?
The first misconception says, “Square only targets micro-merchant accounts. They are not competing for the larger, well established merchants I am selling.”
Square is continuing to grow their presence in brick and mortar businesses. They’re growing even more now with eCommerce and online merchants, and subscription / invoicing services such as attorneys.
The second misconception says, “Square is losing money. They’ll eventually go out of business, so I don’t need to worry about them.” I believe this is even more prevalent than the first misconception.
To refute this, you need a basic understanding of investing.
A 12% return is considered good on an investment. For easy math, let’s say this 12% is a 1% monthly return. This means we get a $1,000 monthly return on an investment of $100,000. If I invested $100,000 at this rate of return, you could say I lost $99,000 the first month. However, that’s not true. I simply made an investment that will return over time.
Square has spent millions on their marketing. That’s an investment to buy merchant accounts. Although they’re losing money on the profit & loss reports, they are actually investing in merchant accounts that will generate a return for years to come. Keep in mind, Square is not paying residuals to agents and ISOs.
What can we do about the Square price increase?
The price increase means Square is just another big processor like First Data and TSYS. They can no longer use the crazy branding strategy they’ve had for so long. Basically, Square has jumped into the mud pit with the rest of us!
They are no longer floating above the complexities of our industry with their all-in, flat-rate pricing model. Now we can compete on a level playing field.
Are you ready to train merchants and support your technology better than Square?
If you haven’t joined my Pro Club, you’re missing great information on this and many other relevant subjects. I’m sharing a new marketing piece with our Pro Club members entitled, “Is Square Increasing Your Price?” There are many headlines about their price increase from major news outlets, and we present alternatives like Clover and Poynt. You can find out what other industry people are saying in our exclusive Facebook group. Join today.