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Why is there a higher fee for Virtual Terminal payments?

The title of this thread has been edited from the original: Virtual Terminal fees very high

 

It seems to me that the Virtual Terminal Pricing prices are truly high. I do a lot of work that is labor related and when I have to sell products my margins are not exactly great because I have to compete against online Internet stores who somehow seem to get away with selling products at a unreal low-price which makes it of course very hard on me to give the customer the best price but when I get hit with a 3.5% charge because I cannot get to the customer to slide the card through a card reader because they are a monster size institution it hurts and I may have to start looking for another source with a lower price or fees

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Square Community Moderator

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Hi there. 

 

Virtual Terminal and manually keyed in payments have a higher fee because they actually cost us more to process. This is due to the greater risk involved with processing these payments, as neither the card nor the buyer have to be present for this type of payment to occur.

 

If you're needing to charge businesses that aren't able to swipe their card in person, you could benefit from using Square Invoices

 

This would allow you to send your customers an invoice via email, and they can enter their card information for the payment on their end. The fee for this transaction is a lot lower than Virtual Terminal or Manually Entered payments. 

 

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Square Community Moderator

Best Answer

Hi there. 

 

Virtual Terminal and manually keyed in payments have a higher fee because they actually cost us more to process. This is due to the greater risk involved with processing these payments, as neither the card nor the buyer have to be present for this type of payment to occur.

 

If you're needing to charge businesses that aren't able to swipe their card in person, you could benefit from using Square Invoices

 

This would allow you to send your customers an invoice via email, and they can enter their card information for the payment on their end. The fee for this transaction is a lot lower than Virtual Terminal or Manually Entered payments. 

 

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I presently use square for 2 of my businesses, the fee is just too high now a days.  There's so much competition now that the rates you can recieve are just about cut in half. One business brings in $500k you start to notice that extra percentage charges. Are you guys looking at the prices being offered from other companies? These are legit 5 star companies I'm referring to not fly by night companies. I'm just curious if your company plans on keeping those rates or look at some of the competitors rates and match them? Thank you

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Square

Hi @Richie21. Thanks for taking the time to post on the Seller Community. In regards to custom pricing, we can evaluate custom pricing packages for some businesses with an annual credit card revenue over $250K and an average ticket size over $15. If think you fit into that category, please reach out directly so our Business Services Team can have a closer look. 🙂


Sean
he/him/his
Product Manager | Square, Inc.
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I just started my business and have made $20,000 in sales so far. I have already been approached by Evo (powerpay), and Linkpoint, both of which have quoted me about half the rate you are charging me (2.1% and $0.25 per batch). Is there someone I can talk to about my payment schedule or should I just go ahead and switch over to them?

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Alumni

Hi @FunnyBugBees - Congrats on your high sales! You should follow the link in @Sean's post to reach out to our Business Services team. They'll be able to answer your questions!

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