When selecting a payment processor, companies need to compare different credit card processing payment models to ascertain which one works best for their business. Square and Stax are two top merchant services providers with distinct POS system payment models and payment processor fee structures. This article conducts a payment processor cost comparison to enable companies to comprehend the primary differences between Square fees and Stax fees.
Understanding Payment Processing and Fee Structures
A payment processor provides an intermediary for merchants, consumers, and banks to guarantee safe transactions. Payment processors incur several types of transaction fees, subscription fees, and interchange fees, depending on the nature of service offered. The cost of payment processor usage relies on various parameters such as the volume of transactions, channels of sales, and the industry type.
Square Payment Processing Fees
Square is famous for its simple credit card processing fees and obvious POS system transaction fees. Square doesn’t charge a payment processor subscription fee, so it’s an attractive choice for small businesses who like the pay-as-you-go method.
Square Fees and Stax Fees Structure
- In-person transactions: 2.6% + $0.10 per transaction
- Online transactions: 2.9% + $0.30 per transaction
- Manually keyed-in transactions: 3.5% + $0.15 per transaction
- Square POS fees: No monthly fee; hardware prices vary
- Chargeback fees: $0 (Square pays the first $250 monthly)
- Instant transfer fees: 1.75% per transfer
- ACH payments: 1% per transaction (minimum $1 fee)
- Payment gateway fees: Subsumed in transaction fees
Square’s merchant services fee system is straightforward and has no hidden fees, which is best for businesses with varying transaction volumes. It may be too expensive for high-processing-volume businesses since there are higher per-transaction fees.
Stax Payment Processing Fees
Unlike Square, Stax charges on a subscription basis for credit card processing. Businesses pay a fixed monthly payment processor subscription fee in return for reduced transaction fees.
Stax Fee Structure
- Monthly subscription fee: $99 and up (depending on business size and volume)
- Interchange rate + flat markup:
- Swiped/dipped/tapped transactions: Interchange + $0.08–$0.15
- Keyed-in transactions: Interchange + $0.15–$0.25
- Stax POS fees: Depends on hardware choice
- Chargeback fees: $25 per chargeback
- ACH payments: Interchange + $0.25 per transaction
- Instant transfer fees: No additional fees (as part of subscription)
- Payment gateway fees: part of monthly subscription
Stax’s credit card processing cost calculation reveals that it is more cost-effective for those processing large quantities of transactions. That said, the subscription nature of the offering implies that smaller volume businesses would struggle with monthly expenses.
Primary Differences Between Stax and Square
Transaction Fees and Processing Fees: Square charges the same percentage for each transaction without monthly fees. Stax offers a lower per-transaction cost but has a monthly subscription requirement.
Cost Effectiveness Based on Business Volume: Small companies or new businesses with irregular sales would find Square’s no-monthly-fee attractive. High-volume businesses save more with Stax’s subscription service with lower per-transaction rates.
Chargeback and Risk Management Fees: Square offers up to $250 per month in chargeback protection without extra charge. Stax charges $25 per chargeback, which may be costly for businesses in high-risk verticals.
POS System and Hardware Fees: Square and Stax both provide POS systems, but hardware fees depend on the needs of the business.
Payment Processor Cost Analysis: Square vs. Stax
Feature | Square | Stax |
Pricing Model | Pay-as-you-go | Subscription-based |
Monthly Fee | $0 | Starts at $99 |
In-Person Transaction Fees | 2.6% + $0.10 | Interchange + $0.08–$0.15 |
Online Transaction Fees | 2.9% + $0.30 | Interchange + $0.15–$0.25 |
Manually Keyed-in Fees | 3.5% + $0.15 | Interchange + $0.15–$0.25 |
ACH Payment Fees | 1% (min $1) | Interchange + $0.25 |
Chargeback Fees | $0 (up to $250 covered) | $25 per dispute |
Instant Transfer Fees | 1.75% | Included in subscription |
Hardware Costs | Varies | Varies |
Payment Gateway Fees | Included in transaction fees | Included in subscription |
Pros and Cons of Square and Stax
Square Pros
- No monthly fees are perfect for businesses with low sales or inconsistent sales.
- Simple and transparent pricing.
- No chargeback fees for disputes below $250 per month.
- An extraordinary POS and payment gateway system.
- No long-term contracts or early cancellation fees.
Square Cons
- Higher per-transaction fees that can pinch severely for a high-volume business.
- Prefers doing low-key customer support compared to other possible competitors.
- Additional fees may incur for instant transfers and ACH payments.
- Costs less depending on transaction volume are highly unfavorable for the merchants.
Stax Pros
- Lower processing fees for high-volume businesses.
- Long-term economy for a subscription model by businesses processing high amounts.
- Instant transfers included in the subscription with no fees.
- Full payment solutions and integrations.
Stax Cons
- Small or low-volume businesses may find the monthly subscription fee prohibitive.
- Any chargeback in high-risk industries can easily add up at $25 per chargeback.
- The pricing model is a little more complex, so businesses have to do some analysis to see how much they can save.
- To reap the savings, you need stable processing volume.
Which Payment Processor is Right for You?
Square excels in small business, startup, and low-volume transaction organizations because of its lack of monthly payment or fixed credit card processing transaction charges. It is less costly for businesses with low or irregular transaction activity.
It is cheaper for high-volume merchants to procure such services because monthly fees reduce total merchant services transaction fees according to the subscription business model. Merchants with stable and high processing volumes will save a lot with Stax.
Final Thoughts
Both Square and Stax have unique payment processor pricing models, which suit different business requirements. On Square’s side are minimalism and flexibility, whereas Stax is suited for companies that have a tendency towards less expensive transaction fees in the long run. Volumes of transactions, sales channels, and other particular costs involved in POS system pricing plans must be checked by the business prior to arriving at a decision. Familiarity with these merchant services fee models and a detailed cost analysis will allow the company to make the appropriate processor selection for achieving optimum profit.
FAQs
What’s your verdict: Which one of the Square or Stax incurs minimal charges for doing business with small businesses?
Square would be better for small businesses with low transaction volumes, as it doesn’t charge any monthly fee and offers simple pricing.
Will I incur extra charges for instant transfers with Stax?
No, instant transfers are an included fee within the Stax subscription. Square, however, charges an 1.75% fee for each transfer.
How does Square or Stax handle chargebacks?
Square offers a coverage of up to $250 per month for chargebacks at no additional cost, while Stax charges $25 per chargeback incurred.
Can I bring in online payments to Square or Stax?
Yes. Both Square and Stax accept payments online, but with differing rates applied. Square would charge 2.9% + $0.30 per transaction, while Stax charges interchange + $0.15-$0.25.
Are there contracts attached or fees for cancellation from either Square or Stax?
Square does not bind a consumer to long-term contracts or charge cancellation fees. Stax, too, charges no fees for cancellation, although the subscription model might require a commitment for cost-effectiveness.
Which is more economical to run for high-volume businesses?
For high-volume businesses, Stax is usually more economical because its monthly subscription fee is offset by lower per-transaction fees.
Do Square and Stax have POS hardware?
Both offer POS hardware, but the price differs based on the equipment chosen