Cost Plus Payment Processing

Cost Plus Payment Processing is a payment pricing structure that involves you as a seller paying the costs of processing each payment plus a fixed markup that Square as your payment processor takes as revenue. There are two components of Cost Plus:

1. Cost of processing payments - Variable transaction fees and network fees which come directly from card issuers and networks like Visa and Mastercard.
2. Plus - The fixed markup that Square charges on top of the cost of processing. This is unique to each seller and reflected in your agreement. It typically includes a percentage fee.

The cost of processing payments will vary based on many factors, including the card types your buyers use (e.g. credit card vs debit card). Cost Plus offers transparency into these costs and the added markup for each payment.

With Cost Plus Payment Processing you will be charged an initial blended payment processing fee at the time of a transaction. Square will transfer money from payments, minus the blended payment processing fee, into your bank account in one to two business days depending on your settlement schedule. Once per month, Square will determine the total cost of processing each transaction. We then add your negotiated markup to each transaction to reflect Cost Plus pricing. Each month we will issue an adjustment to your account to reflect the cost of processing transactions plus a fixed markup for transactions processed in the previous month.

Payment processors like Square are charged fees by card networks for processing transactions. These fees can be assessed based on the number of locations, the nature of the business, the volume of transactions and other factors determined by each network’s rules (e.g. Visa’s Fixed Acquirer Network Fee). Square will pass these fees through to sellers each month for payments processed the previous month without adding a margin.

When Square processes transactions, we are charged per-transaction fees by issuers and networks. The largest component of these fees is interchange or discount rates, which go to card issuers and are set by card networks like Visa and Mastercard.

With Cost Plus, your overall processing fees are a function of the type of cards you process because Square is passing on to you the costs to process your payments. Some cards, such as certain international cards, incur higher processing fees, while other cards, such as debit cards, incur lower processing fees.