Square Credit Card Processing Versus a Merchant Account

Many of our clients are interested to know the difference between Square credit card processing and a merchant account. Here are a few important distinctions merchant should be aware of when researching the two methods.

Funding and Deposit of Credit Card Funds

Square limits the weekly deposit amount to $1000. The rest of a merchant’s funds are deposited after 30 days. For example, if you process $10,000 for a catering event, Square will give you $1000 next day but will hold on to the remaining $9000 for the rest of the month. Talk about serious cash flow limitations for everyday business costs.

A PaymentMax merchant account will deposit all funds next day as long as transactions are not deemed high risk. This can occur when a merchant processes outside of their declared average ticket and monthly volume amounts. For example, if you declare an average ticket amount of $10,000 for your catering company, and you process a transaction for that amount-you will receive all of the funds next day.

Business Image

Anyone can obtain a Square account. Babysitters, dog-walkers, your best friend who has loaned you money are all square candidates. Square’s slogan, “the friendly neighborhood way to pay” describes it’s client base.

A merchant account, on the other hand, is only available to legitimate businesses who provide proper documentation.  A merchant account displays a more professional image to customers.

Pricing

Square boasts about transparent pricing on their website 2.75% for swiped, and 3.5% plus .15/transaction for keyed in. This flat rate sounds appealing but what about if you have a chargeback? or a return? There are no mention of these fees on their website.

A merchant account looks at every business differently. The lower the risk the lower your rate. The more transactions you process the lower your rate. The longer you have been in business the lower your rate. Square meshed all the business types together and came up with a flat rate. Many businesses will receive rates much lower than 2.75% and 3.5% (plus .15/transaction). Take the time to receive rate quotes from merchant account providers and compare them to Square’s rates.

For more information on merchant accounts, next day funding, or smartphone credit card processing visit www.paymentmax.com