The days of "cash only" are close to being a thing of the past, thanks to companies like Square, Inc.
Square is known for offering an inexpensive, simple way for small and locally-owned businesses to accept credit cards using devices that plug right into a tablet or cell phone. Square then takes a fee per card transaction.
But that fee is changing November 1.
Square's fee for in-store credit card purchases is changing from 2.75 percent per transaction to 2.6 percent plus a 10 cent flat rate. That means for a $4.00 coffee purchase, Square would take 20 cents instead of 11 cents.
The company's website has an FAQ page for the change that says, "the updated pricing structure takes into account the full cost of operating our business and all market forces. As the Square ecosystem and payments industry evolve, we must review our business and adjust accordingly. We are committed to keeping all costs to our sellers as low as possible."
Businesses in Hampton Roads are bracing for the impact of the new fee structure.
Three Ships Coffee in Virginia Beach put out a Facebook post asking customers to consider paying in cash.
Owner Amy Ewing told News 3 over the phone they expect to pay Square 33 percent more in fees year-to-year and that she wanted customers to know where there money is going.
Ewing says she's not switching from Square because the company has so much of her business data that it would be too difficult to move to another system.
Small businesses in Norfolk's Selden Market told News 3 they plan to absorb fee increases because Square offers so many benefits.
“My goal is to not raise my prices, but what I think I’m going to do is have a minimum for credit card transactions just to cover that bump," said Cody Kloock who owns Baked AF 757, a shop selling gluten-free baked goods. "On smaller items you’re going to feel that percentage but if you have higher dollar ones it’s not as bad.”
Over at S'mores Amore, it's a similar story.
"What that is, it remains to be seen because of the holidays and all but with that in mind we`re trying not to pass that to our customers. It is what it is. Processing fees, we`ll definitely keep our eyes on those," said Owner Duane Dinio.
News 3 reached out to Square to get more information about the reasoning behind the fee change and got the following statement from a company spokesperson:
"We are changing the US card present rate for Square Point of Sale (meaning any swiped, dipped, or tapped card transactions) from 2.75% to 2.6% + 10 cents. This change will go into effect on November 1 for existing Square sellers. We are making this change to better align our rates with industry-wide-transaction costs. Our card not present pricing has always reflected this structure and now our card present pricing will as well. We are committed to continuing to deliver accessible, easy to use tools that help sellers of all sizes start, run, and grow their business."
Square also adds that businesses can reach out to the company's sales team to ask about custom pricing.
Three Ships Coffee says it's tried that, but Square wouldn't budge.
