Pros and Cons to Having a Merchant Account vs. Using Square
Advantages to Using Square
A lot of small, independent businesses use Square for their credit card processing and very few medium and large companies use Square. Why is that? For some, it makes sense. There is no application required. The card reader is inexpensive ($10), there are no monthly minimums or statement fees and with a flat fee, it’s easy to determine what your proceeds are on each sale. That all sounds great and for some it is. If you have a primarily cash business but occasionally have to accept a card, Square is a good solution. If you don’t have much volume, (under $5K a month), Square makes sense. If you sometimes, but rarely, need a mobile form of card acceptance Square is a good fit. Those are about the only conditions where Square has an advantage.
Disadvantages to Using Square
First and foremost are the costs. Square is a flat fee processor with very high rates- (2.6% + $0.10 per transaction for in-person card acceptance and 3.1% + $0.30 per transaction for keyed-in sales) Square cannot be customized to suit your needs. One size fits all is not a good solution for many businesses- small, medium, and large. If your business has a monthly volume of over $5000 a month and using Square, you are paying extremely high processing fees. If your business has a lot of small sales, the transaction fees will drive your processing costs through the roof. Square holds funds and takes days to make the deposit to your bank account. Early deposits are available but are charged exorbitant fees. Customer service is virtually non-existent. Good luck talking to a customer service representative if you have an issue.
Disadvantages to Having a Merchant Account
As with most things in life, there are some advantages and disadvantages to everything, and having a merchant account is no different. Merchant accounts are more difficult to establish requiring an application and underwriting to approve the account. For established businesses, this is usually no problem. For startups, it may require the business owner to be a personal guarantor. Depending on the business dynamics, there may be some equipment costs but then again, there maybe not. Each case is different. Many merchant statements can be confusing and difficult to read. Some less reputable processors and banks do this intentionally to hide junk fees that increase account profitability.
Advantages to Having a Merchant Account
First and foremost is the lower cost of card acceptance. This cannot be overlooked as it could save your business 10s of 1000’s of dollars annually. Square’s flat fee and transaction fees can be lowered significantly for the vast majority of businesses with a merchant account. A reputable processor will implement a customized payment solution that will minimize your processing fees and increase your profitability. There are several processing structures not available with Square. Free equipment may be provided depending on your needs. Same-day and/or next-day deposits are available at no additional cost. Customer service is definitely better with a merchant account. You will have 24/7 customer support and local representation not available with Square. For established businesses, the equipment can integrate into your existing POS systems in most cases. Increased security and encryption not available with Square
What Makes Us Different?
Competitive Rates– As a customer, if you receive a legitimate offer that would result in you paying less per month for your credit card processing, we will provide a side-by=side comparison and meet or beat that offer or pay you $500.
Security– We have state-of-the=art encryption and tokenization systems that allow us to offer a $10,000 fraud protection policy in the event of a data breach
Guarantee– We offer a 60 Day No Mistakes, No Regret Policy. Try us for 60 days and if you’re not happy, neither are we. We will pay to return you to your previous processor
Transparency– We don’t hide junk fees in our merchant statements. All statements are clear, concise and easy to understand with no hidden fees
Custom Solutions– We are not a one size fits all service provider. After a free consultation, we will recommend a solution tailored to best suit your business needs while minimizing your risks and maximizing your profitability.