Square, the mobile monthly payments company, is ending their monthly pricing options starting February 1, 2014. Square will not be reinstating monthly pricing at any point again going forward from there.
If you have monthly pricing, Square is offering a grace period through the end of January 2014. After that, the per-swipe rate will be applied to the transactions. The last monthly fee for subscribers will be billed on January 2nd and covers the rest of the month.
The reason why Square decided to discontinue their monthly prices is because many customers believed that caps and limits in the program inhibited growth. After a certain point, the rates went back up the more that people sold. Square wanted to simplify the pricing by offering one low, flat per-swipe rate.
The caps were not working for customers because businesses could only process up to $250,000 per year. After that, they were required to pay the standard 2.75% rate. Larger businesses that were on Square’s monthly plans were given rates lower than the Square standard rate, which was calculated based on the type of business and history as a Square customer.
These changes mostly benefit larger businesses, but not freelancers and independent businesses.