From collecting payments in-store to offering virtual, contactless options, choosing the right payment processor with the best cost is critical for the success of your business.
There are many aspects to consider when it comes to choosing a payment processor to conduct transaction-related activity for a business. For instance, it is necessary to account for payment processing fees, how it will work with a business bank account, and how it works with credit card fees. One might be concerned with credit card fees, payment type options, and linked bank account features.
With hundreds of credit card processors and merchant services providers in the U.S., it’s easy for small businesses to get overwhelmed with the expanse of options, offerings, and pricing for payments.
To help simplify the process, we’ve gone ahead and compared Stax’s products and services with that of one of our industry’s well-known competitors: Square.
Both Stax and Square offer top-rated payment options, but which one is the better fit for your business? Let’s break down the numbers when it comes to Stax fees vs. Square fees.
To help simplify the process, we’ve gone ahead and compared Stax’s products and services with that of one of our industry’s well-known competitors, Square Payments.
Both Stax and Square offer top-rated payment options, but which one is the better fit for your business? Let’s break down the numbers when it comes to Stax fees vs. Square fees.
What Does Square Have to Offer?
Launched in 2010 with the Square Reader, Square offers a software platform best suited for start-ups and micro-businesses. The company does work with Visa, MasterCard, Discover, and American Express.
It offers a Square terminal, a Square card reader, a Square contactless and chip reader, and other Square Point of Sale options.
The company also offers eCommerce options so that you can process card-not-present transactions, and pay nominal card processing fees based on the transaction amount.
The company has continued to expand its easy-to-use payment products and software as they look to remain competitive in the marketplace and help scale small businesses. As a result, they offer a variety of plans and products, including an array of flat-rate pricing.
From its Square chip reader and general Square readers to other products, these innovative aspects are why a business may choose the company to handle its payment processing needs.
Square allows you to quickly pick a starting point to immediately open a free account. It is important to note that Square is simply a third-party payment processor and does not offer a traditional merchant services account.
That means that while they do have restrictions for certain business types in using their services, they are not a traditional merchant services provider and have no risk review or underwriting process for businesses to go through to open an account.
RELATED: What Square Payments New Pricing Means for Your Small Business?
How Much Are Square’s Fees?
While opening an account and starting to process payments is free, there are several Square fees that also come into play as your business starts to need additional options and services.
Square charges a flat rate on each transaction a small business processes regardless of whether it’s a debit or credit card.
For transactions that are processed using an in-person POS or card reader when a customer has swiped, dipped, or tapped their card they charge 2.6% + $.10 per swipe.
However, this does not account for the rates they offer when using specific Square products, as the flat rate will vary based on how you collect your customer’s payment.
Additionally, Square offers other transaction rate options based on what Square product you’re using. For example:
- 2.5% + $0.15 per swiped, dipped, or tapped transaction using a Square Register
- 2.6% + $0.15 per swiped, dipped, or tapped transaction using a Square Terminal
- 2.6% + $0.10 per swiped, dipped, or tapped transaction using Square Appointments (or 2.5% + $0.10 for Teams)
That is not to mention their different rates for certain card-not-present transactions where you need to charge online payments, collect payments by phone, or virtually through an online invoice. In these cases, the rate can jump up to 3.5% + $0.15 per transaction. These are factors to consider when thinking about fees paid per transfer or transaction.
Now that you know what Square’s fees are on paper, let’s look at some examples of how much you would pay when processing credit card transactions with Square. We’ll also compare these figures with Stax’s pricing.
Stax vs Square Credit Card Processing Fees Scenario 1: Card Present
Let’s say your business processes $18,000 CP payments per month with four $150 sales purchased using a rewards debit card per day for thirty days. Here’s how much each pricing model’s credit card processing costs could affect you:
| Stax Fees* | Square Fees |
|---|---|
| $306.60 | $480 |
Stax vs Square Credit Card Processing Fees Scenario 2: Card-not-Present
Now, let’s say you take payments through online invoices or over the phone. Your business keys in four $150 sales per day for a total of $18,000 per month in CNP processing. Here’s how much this can cost your business:
| Stax Fees* | Square Fees |
|---|---|
| $405 | $648 |
As you can see, with per-transaction costs that can go as high as 3.5% + $0.15, you could be paying up to 60% more in Square CNP transaction fees per month than if you processed with Stax.
While most of Square’s merchant services offerings are very similar to Stax, their additional fees and status as a third-party payment processing provider can quickly make them a more expensive and somewhat riskier option over time, especially as your business begins to grow.
*Interchange is set by the card associations like Visa and Mastercard and is a required cost for taking credit cards. The exact interchange rate for each transaction is affected by dozens of factors. Interchange can be less than 1% for certain in-person debit cards and over 2.7% for some keyed-in rewards credit cards. For these examples, we averaged a number of common interchange rates and applied 1.65% for card-present transactions and 2.15% for card-not-present purchases to showcase.
Are There Any Other Square Fees I Need to Know?
While your business may start off with just the basics, over time the need for more robust software solutions will start to rise and will certainly increase your monthly costs.
This is especially true if you fall in the retail, restaurant, and professional services space as Square offers specialized plans for those industries starting at $50-$60 per month.
If your business begins to use additional registers, another $20-$40 monthly fee per additional device is added to the service.
Additionally, their limited chargeback protection policy can cost your business, in the long run, the more you transact.
Why the Lack of Underwriting Can Lead to Problems
While Square does not charge any chargeback fees, their lack of an underwriting process means your Square account has an increased risk of sudden account holds and terminations. Any sudden changes in patterns or large spikes in transaction amounts may be seen as suspicious, resulting in a freeze while they review your account. This is something businesses can ill afford at any point in time.
The essential points that you must think about when it comes to additional Square fees are the need for software, auxiliary equipment, and the level of protection present within the process.
Remember that each of these points is critical when you are starting and growing your business. It is best to choose a service that can process different payment types for your business without adding more stress to your shoulders as you scale up.
This is a crucial point when it comes to chargeback protection, underwriting, and potential issues with your funds. It can be a challenge to market and bring customers to your business and accept their various card payments.
But it can be even more difficult to manage your business and cashflows if you are not sure if the funds you receive are definite or subject to be frozen due to external checks and issues.
Remember to think about these aspects as you move forward.
Here’s a Quick Summary of Square’s Benefits and Limitations:
The Pros of Choosing Square
- Quick to start and easy to use payment processing
- Fraud and security protection tools
- Online and mobile dashboard
- Modern payments technology to process transactions
- Immediate Access
The Cons of Choosing Square
- Limited to no ACH payment processing
- No PCI Compliance Support or assistance
- Primarily email customer service
- Limited terminal and POS options
- Varied flat-rate transaction fees as high as 3.5% + $0.15 per transaction
An important note here is that limited or no ACH payment processing support can be a problem if you are trying to minimize your interaction with more third-party providers when it comes to fund transfers.
The more parties involved in your payment types and card payments, the more likely you will obtain fewer funds from your sales due to processing rates.
The next critical point is that PCI compliance support and assistance matters to businesses in an era where everything is going digital and information is critical. That means that payment data and credit card information storage are as important as processing rates and hardware.
Companies that seek to help you with this PCI compliance for free understand that each component of payment processing matters and that it is not about surface-level processing only that provides value in your transaction-oriented business.
Square and Stax Merchant Reviews
Both Square and Stax have generally favorable reviews on merchant websites. Square has a 5-star rating on Merchant Maverick and GetApp gives it a rating of 4.7 stars.
Merchants that use Square appreciate the software’s clean user interface and ease of use. However, there have been a few complaints about poor customer service and Square shutting down accounts with little to no explanation.
“This company embarrassed me in front of customers after processing one transaction with their software… they canceled my account without explanation after multiple attempts to contact them.” – Gary P
Meanwhile, Stax also has a 5-star rating on Merchant Maveric and 4.8 rating from GetApp.
Businesses that use Stax love the merchant-friendly pricing structure and friendly customer support reps.
“Flat rate pricing! Oh man, this is a breath of fresh air. After using Stripe and Square to process payments we have absolutely loved the simplified pricing structure that [Stax] uses. Only paying interchange fees and a fixed monthly rate saves us $100’s each month.” – Matt M.
Stax, the Way Payment Processing Should Be
While Square claims other bank and payment processors are unable to include similar offerings, this couldn’t be further from the truth.
Ranked as one of the best merchant services companies nationally, Stax is a subscription-based merchant service provider with total transparency built into its model. All merchants have access to direct cost payment processing with 0% markups, no contracts, and no hidden fees.
Stax treats our members like family. Whenever you call in with a question, issue, or just to chat – a real person answers the phone every time (no automated calls). This is the perk of working with a more customer-centric company.
With Stax, someone is ready to answer the phone every time. We eat, sleep, and breathe payments – so you can rest easy knowing that you’re getting the kind of white-glove customer service you deserve.
Here’s a quick summary of Stax processing fees and why we are the best merchant services provider for your business:
- No contract
- 0% markup
- No hidden fees
- Quick setup
- Recurring billing
- Easy to read statements
- 24/7 live customer service
- Flat monthly subscription (save up to 40% versus traditional processors)
- Next day funding for approved businesses
- POS, eCommerce, mobile, and virtual terminal solutions
- Can integrate with most already established POS systems
Each business is unique, and it pays to understand exactly what will work best for you as you explore your options. At Stax, we provide easy-to-use yet highly effective payment solutions to businesses of all sizes.
We pride ourselves on knowing what our business partners need in every aspect of payment processing. That is why many of our partners choose to stick around for quite a while.
We structure our payment processing fees a little differently than others in the market and acknowledge the differences we have between our credit card processing solutions.
By offering comprehensive knowledge on payment card processing brands and options,, we can provide you with everything you need to make the best decisions possible and enable the best transaction flow with ease.
You Might Also Like: Stax Contactless Solutions vs. Contactless Square Payments
Find out how we continue to serve as a premier solution for various business types in credit card payments and other payment types. Stax makes it our mission to ensure that you can take in payments and process them accordingly so that you can focus on your core business aspects.
Whether you need a credit card reader or a magstripe reader or want to ensure that you can deal with several credit card companies, remember that Stax is here for you.
To learn more about our top-ranked merchant services and how they can help grow your business, feel free to reach out to us today. We will be happy to answer any questions you have and help you obtain the right payment processing solution for your needs.
FAQs about Differences between Square and Stax Fees
Q: What are the main differences between Square and Stax fees?
Square charges a flat rate on every transaction a small business processes, regardless of whether it’s a debit or credit card. The rate varies based on how you collect your customer’s payment. Square’s fees can also increase with the need for more robust software solutions or additional registers. Stax, on the other hand, offers subscription-based payment processing with a 0% markup. The cost of Stax’s services can be less than that of Square’s, depending on the type of transactions processed.
Q: What payment options do Square and Stax offer?
Both Square and Stax offer comprehensive credit card processing solutions. Square provides an easy-to-use platform for start-ups and micro-businesses and supports Visa, MasterCard, Discover, and American Express payments. Features include the Square terminal and reader, contactless and chip reader, and other Point of Sale options. Similarly, Stax provides direct cost payment processing, recurring billing, POS, eCommerce, mobile, and virtual terminal solutions. It can integrate with most already established POS systems.
Q: How does the fee structure differ between Square and Stax?
Square charges a varying flat fee per transaction, processed using different methods such as in-person POS or card reader, Square Register, Square Terminal, or online invoices. These rates range from 2.5% + $0.10 to 3.5% + $0.15 per transaction, depending on the transaction method. Meanwhile, Stax follows a subscription-based pricing model with a 0% markup.
Q: What are some potential drawbacks of using Square as a payment processor?
One concern with Square is its fee structure, which can lead to varying costs that can increase as the business grows and requires additional services. Square also has limited ACH payment processing capabilities and lacks PCI Compliance Support, which may be vital for businesses in a digital era. Additionally, despite its quick startup process, Square’s lack of an underwriting process can risk sudden account holds and terminations, affecting the business’s cash flow.
Q: Are there any additional costs to be aware of with Square?
Square might charge additional costs as a business grows and requires more services. These could include costs for using additional software solutions, auxiliary equipment, or more registers. Additionally, limited chargeback protection could also lead to potential costs.
Q: What makes Stax different from other payment processors?
Stax differentiates itself by offering transparency in its pricing model, in addition to its direct cost payment processing and 0% markups. Furthermore, Stax prides itself on personalized customer service.
Q: Which providers are known for better customer service, Square or Stax?
Merchant reviews generally reflect favorably on both companies, but some Square users have noted poor customer service experiences and unexplained account shutdowns. Stax, on the other hand, has received praise for its merchant-friendly pricing structure and receptive customer support.
Q: Why is underwriting important in payment processing?
Underwriting is a precautionary step payment processors take to guard against fraudulent or risky transactions. In Square’s case, their lack of underwriting may lead to an increased risk of sudden account holds and terminations, negatively impacting your business operations and cash flow.
Q: Does Stax offer savings on processing fees compared to Square?
Yes, Stax promises that small and medium businesses (SMBs) can save up to 40% on credit card processing fees compared to Square.
Q: Does Stax offer a quick setup like Square?
Yes, similar to Square’s quick startup, Stax also provides a quick setup process. The difference lies in the services, and the fee structure offered post-setup.
