Your dream finally came to fruition, after years of thinking; hoping and planning you now own your own business. You are your own boss, congratulations. No one to report too, no one to answer too, it is your vision, you steer the ship. Now that you are in charge, it is up to you to do everything and I mean everything. You realize you need to accept credit cards, what do you do? It seems so complicated. You don’t have time or the energy to dive head first into the work of understanding payments. You just need to accept cards from your customers and fast. In an effort to get up and running for merchant services, you sign up through a website called Square. They seemed to have made the process easy; if you don’t run credit cards in a month you don’t have to pay, that sounds great especially since you have no idea how many sales you will be making in your first few months. You like the simple concept of one flat rate and it only took a few minutes to sign up online.
Now your business is doing well, you’re over that freshman hump. You’ve adjusted your inventory, possibly added staff, the business is on track and sales are increasing, all great news. But is your merchant service account keeping up? My guess is no. That same flat rate you thought was so easy, so simple, so enticing, now may seem… well not as attractive. Not as attractive if you have the time to look at it. Yes, the statements seem easy to review, the concept is straight forward and the process is simple. With your growing sales, is a Square really right for you and your business? Did you know that flat rate is not as simple as it sounds, you actually only receive that flat rate when you swipe a card. If you key in a card, that flat rates changes, you now pay a higher percentage and a $0.15 transaction fee.
Don’t get me wrong, Square is a great concept. Square offers people the ability to accept credit cards in a very simplistic way. It offers people the ability to accept credit cards but when you are a business owner, a business owner with a store front. A business owner that is accepting more than a few hundred dollars a month in credit cards, Square becomes less attractive. Sure they are doing everything to make it seem like they are the correct solution for your growing business. But the truth is you may be better off signing with a merchant service provider that can price the cards you accept based on their merits and not a flat rate.
Support. Support is a huge driver why business owners leave Square and sign up through a merchant service provider. You may have noticed with your Square account you have zero support. No phone number to call, no sales person to consult, just an email address. Do you feel comfortable having Square handle the majority of your business’ income without a way to get on the horn and talk to a real live someone? Most people answer that question with a resounding no. They answer no, especially if they never thought of the situation in terms of support, how do I get help? This is your business, this is your living, this is your dream, and you should be able to talk to someone.
Speaking of support, Square has a history of terminating accounts without warning or placing your funds on hold for extended periods of time. Now, account holds are standard in the industry and can happen with any merchant service provider. Account holds protect all parties from the risk of fraudulent activity. But unlike a merchant service provider, Square offers you only an email address. When your money, the money you are counting on to be deposited into your bank account does not show up, if you are like me, you want to talk to someone. You need… no you deserve an explanation especially if they terminated your account. Why has Square set these strict parameters for your merchant account? It is because you do not have a unique merchant identification number as you would with a merchant service provider; your account is an aggregate account.
Aggregate merchant accounts tend to be more vulnerable to fraud. Merchant service providers will assign a unique merchant identification number (MID number) for each business owner when they sign up for merchant services where as an aggregate account is not assigned a unique MID. Aggregators like Square, group all their merchants under one unique MID number and your account is given a sub-account. This is great if you are running under a few hundred dollars per month in sales like; Tupperware parties, but is this your business model?
People love simple and free. As a business owner you know nothing is simple or free, everything has a price.