Square Raised My Rates Again: Why It Keeps Happening and What You Can Do

You probably noticed it on your last statement. Or maybe you saw the email buried in your inbox. Square raised your rates. Again.

If you have been using Square for a few years, this is not the first time. And it will not be the last. Square has quietly increased fees multiple times since launching, and every increase eats further into your margins.

I am Grant Denmark, founder of Sleft Payments. I talk to small business owners every day who started with Square because it was simple and free to get started. And every one of them reaches a point where they look at their monthly fees and realize they have outgrown it.

This is not about bashing Square. They built a product that made it easy for anyone to accept cards. That matters. But what works when you are processing $3,000 per month at a farmers market does not work when you are running a business doing $20,000 or $50,000 per month.

Let me show you the numbers.

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Square's Rate History: A Timeline of Increases

Square launched in 2009 with a simple pitch: 2.75% per swipe, no monthly fees, no contracts. That simplicity was revolutionary. But that rate has been climbing steadily ever since.

The base in-person rate looks the same on paper, but the real cost has gone up significantly. Here is how.

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The Hidden Ways Square Costs More Every Year

1. Software Subscription Increases

Square's free plan used to include most features. Now the features that matter (advanced reporting, team management, loyalty programs, marketing tools) require Square Plus or Premium plans. These plans cost $29 to $89 per month per location, and the prices have increased multiple times.

If you are a restaurant using Square for Restaurants, the Plus plan is now $60/month per location. For retail, it is $60/month. These costs did not exist when many merchants signed up.

2. Keyed-In Transaction Rate Increase

In 2025, Square raised the rate for manually keyed transactions from 3.5% + $0.15 to its current level. If you take phone orders, process payments where the customer is not present, or manually enter card numbers for any reason, you are paying significantly more than the advertised 2.6% rate.

For a business that does 20% of its transactions via keyed entry, the blended rate jumps from about 2.78% to 2.96%. On $30,000/month, that is an extra $54/month or $648/year just from that one change.

3. Hardware Lock-In

Square's terminals and registers only work with Square. If you bought a Square Terminal ($299), a Square Register ($799), or a Square Stand ($149), that hardware becomes a paperweight the moment you switch processors. This is by design.

Compare that to a standard payment terminal that works with any processor. You buy it once, and it goes wherever you go.

4. Invoicing Fees

Square Invoicing used to be free. Now, payment processing on invoices is 3.3% + $0.30. If you send $10,000 in invoices per month, that is $360 in fees just for invoicing. For comparison, most standalone invoicing tools charge 2.9% or less, and with interchange plus pricing through a dedicated processor, your rate on those same transactions would be closer to 2.0% to 2.5%.

5. Buy Now, Pay Later Fees

Square offers Afterpay (which they acquired). When a customer uses Afterpay, you pay 6% + $0.30 per transaction. That is more than double the standard rate. It is positioned as a convenience for your customers, but it costs you real money.

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What You Are Really Paying: The True Cost of Square

Let me run the numbers for a real business. We will use a retail store processing $35,000/month.

Transaction Mix

Effective rate: 3.14%

That 2.6% you thought you were paying? It is actually 3.14% when you account for the full transaction mix and software fees.

The Same Business on Cash Discount

With a cash discount program, this business pays $0 in processing fees. The customer sees a small surcharge if they pay by card. Annual savings: $13,197 (the full amount you were paying Square).

The Same Business on Interchange Plus (If Cash Discount Does Not Fit)

Effective rate: 2.04%

Monthly savings: $386.17
Annual savings: $4,634.04

Cash discount is the best option because you keep 100% of every sale. If cash discount does not work for your business, interchange plus still saves you thousands. And both options scale with volume.

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Why Square Keeps Raising Rates

Square (now called Block, Inc.) is a publicly traded company. Their investors expect revenue growth every quarter. There are three ways to grow payment processing revenue:

1. Sign up more merchants
2. Increase the volume each merchant processes
3. Raise rates

The first two are getting harder. The small business market is competitive, and most merchants who want to accept cards already do. So the easiest lever to pull is number three: raise rates.

Square can do this because they have built a closed ecosystem. Your hardware only works with Square. Your sales data lives in Square. Your loyalty program, your gift cards, your online store, everything is tied to their platform. The more services you use, the harder it is to leave.

This is called switching cost, and it is the entire reason Square gives you free software features at the start. They know that once you are deep into the ecosystem, you will accept rate increases rather than deal with the hassle of migrating.

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When It Makes Sense to Leave Square

Not everyone should leave Square. If you are a sole proprietor processing under $5,000 per month, Square's simplicity might be worth the premium. There is no monthly fee on the basic plan, and the convenience has value.

But if any of the following are true, you are leaving money on the table:

• You process more than $10,000 per month
• You have employees and need advanced POS features
• You do a significant amount of keyed-in or online transactions
• You are paying for Square Plus or Premium software
• Your effective rate is above 2.8%
• You want your processing data to be portable (not locked to one company)

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How to Switch Off Square Without Disruption

Switching from Square is actually easier than most people think. Here is the process:

Step 1: Get a Statement Analysis

Before you do anything, figure out exactly what you are paying. Download your last 3 months of Square reports (go to Reports > Payments in your Square Dashboard). This gives you your volume, transaction count, and total fees.

We do free statement analyses that show you a side-by-side comparison of your current costs versus interchange plus pricing.

Step 2: Get Approved With a New Processor

A merchant account application takes about 10 minutes. Approval is usually 1-3 business days. You will need your business details, a voided check, and a government ID.

Step 3: Set Up Your New Terminal

Most terminals arrive pre-programmed and ready to go. Plug it in, run a test transaction, and you are live.

Step 4: Redirect Your Payment Flow

For in-person businesses, this is as simple as using the new terminal instead of your Square reader. For online businesses, you update your payment gateway settings.

Step 5: Keep Square Active for 30 Days

Do not close your Square account immediately. Keep it active for 30 days to handle any refunds or chargebacks from recent transactions. After that, you can deactivate it.

For the full walkthrough, read our complete switching guide.

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What About Square's "Savings" Features?

Square will point to features like Square Savings, Square Checking, and Square Loans as reasons to stay. Let me be honest about each:

Square Savings: Earns 1.5% APY. That is fine, but any high-yield savings account offers the same or better. This is not a reason to overpay on processing.

Square Checking: Free business checking with instant deposits from Square sales. Convenient, but not unique. Most banks offer free business checking, and most processors offer next-day funding at no extra cost.

Square Loans: Based on your Square processing history. This is the one that actually matters. If you are relying on Square Capital for business financing, switching processors means losing access to this lending channel. Plan accordingly.

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FAQ: Square Rate Increases

Did Square raise rates in 2026?

Square has increased costs through higher software subscription prices and maintained the elevated keyed-in transaction rate of 3.5% + $0.15 introduced in 2025. The base in-person rate remains 2.6% + $0.10, but the total cost of using Square has gone up.

Can Square raise my rates without telling me?

Yes. Square's terms of service allow them to change pricing at any time. They typically send an email notification, but there is no requirement to get your approval. You agree to future changes when you accept the terms of service.

Is 2.6% a good rate for in-person processing?

No. A flat rate of 2.6% + $0.10 per transaction is well above what businesses pay on interchange plus pricing. Your effective rate on interchange plus for in-person transactions is typically 1.8% to 2.1%, depending on your card mix.

What about Square's free plan?

Square's free plan is genuinely free to start. No monthly fee, no contract. But "free" just means they make all their money on the per-transaction rate. When you do the math, a $9.95/month account fee with a lower processing rate saves you money at anything above $5,000/month in volume.

Will I lose my sales data if I switch?

No. Export your transaction history, customer list, and item catalog before you leave. Square allows CSV exports of all your data. Your data belongs to you.

Can I use my Square hardware with another processor?

No. Square Terminal, Square Register, and Square Stand are proprietary hardware that only works with Square's processing service. This is one of the biggest downsides of the Square ecosystem.

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You Deserve a Rate That Does Not Change on You

Square started as a tool for the little guy. Now it is a publicly traded company that raises prices to hit quarterly earnings targets. Your business should not be a line item in someone else's revenue growth story.

At Sleft Payments, we recommend cash discount programs first because they let you pay $0 in processing fees. For businesses where cash discount is not the right fit, we use interchange plus pricing. You pay the actual cost of the transaction plus a small, fixed markup that we agree on up front. No bundled rates. No hidden fees. No surprise increases.

Get a free analysis of your Square costs and see exactly how much you could save.

Or reach out directly if you are ready to stop watching your rates climb every year. We can usually have your new account processing within 48 hours.

Your processing rate should be something you agree to. Not something that happens to you.