Jack Dorsey’s payments company, Square Inc., changed its pricing model, adding costs for smaller transactions in a shift away from the flat rate it used to charge.
Rather than assess a 2.75% fee on in-store transactions, Square will now charge 2.6% plus a 10-cent fee, the company said Tuesday in a blog post announcing the change. The change means the fee on a $10 transaction rises to 36 cents from 27.5 cents. Costs for transactions starting at roughly $67 will go down.
“We are making this change to better align our rates with industrywide transaction costs,” the company said.
Retailers often choose Square because of the simplicity of the company’s pricing, and competitors including Wells Fargo & Co. have sought to mimic that success. Historically, companies that process credit- and debit-card transactions for business customers have faced criticism for their complex pricing structures, which can include contracts with dozens of pages of lengthy and confusing rate tables.