The Hidden Cost of “Convenient” Payment Processing: Why One Bagel Shop Made the Switch
Tools like Square are a dream come true for many small business owners. It seems like the perfect solution with easy setup, attractive hardware, and no monthly fees. But as your business expands, those seemingly simple choices can unexpectedly take a toll on your profits.
Just talk to Jen*, a bagel shop owner in northern New Jersey. She discovered the hard way that not all payment processors are made equal, and her experience is a valuable lesson for anyone looking to grow their business.
When Convenience Costs More Than You Think
Jen's bagel shop was thriving, bustling with customers every day. Most of them were grabbing quick bagels for less than $10 and paying with their cards for ease. She went with Square as her payment processor when she opened her shop. It seemed simple, with no upfront costs or complicated setup: plug it in and start taking payments.
However, after about a year, Jen was unsure why her increased sales weren't yielding a bigger profit increase, so she took a closer look at her expenses. What she found surprised her.
At the time, Square's fees were 2.6% plus $0.10 for each transaction. For the average $8 bagel order, she paid around $0.31 in fees, an effective rate of nearly 4%! When she crunched the numbers: 200 transactions a day, every day of the week, it added up to over $18,000 a year to process payments!
She was floored. That money could have gone toward hiring a full-time employee, investing in a new oven, or even updating her shop. It made Jen realize that while Square seemed convenient, it was sapping a lot of her potential.
Then Came the Real Shock
Ironically, only a few days after she realized what fees were costing her, Jen logged into her Square dashboard, only to be met with a cold surprise: her account had been frozen!
There was no explanation, no warning, and, worst of all, no access to the money from her weekend's sales. She desperately tried to reach someone from Square for help but couldn't contact anyone at Square in real-time.
Jen's situation stemmed from a sobering reality—Square acts as a payment aggregator. This means that her business and countless others shared a large merchant account. If there was any suspicious activity, it put everyone at risk. And this time, she got caught in the snare.
The troublesome part? Jen hadn't done anything wrong. Yet, the freeze on her account left her in a tough spot. She couldn't accept card payments or even touch her funds for days. In the food business, that kind of delay feels like a lifetime. Each moment counts.
The worst part. It took Jen months to recover all of her funds finally. Square is not obligated to rush to give you the cash in your account. They can hold it indefinitely and sometimes permanently if you "violate" their community guidelines and/or terms. You have no control over many of these as your account is aggregated.
Can You Imagine?
Can You Imagine?
Later, Jen would say how she'd read about things like this but never thought it would happen to her.
The Better Option: Be Your Own Merchant
We showed her what she was spending and the potential for what she could save. We introduced her to interchange-plus pricing and a cash discount program, which could mean slashing her fees by thousands of dollars yearly.
We provided new terminals and supplies and trained her and the staff. We supported her transition from one platform to the next so she didn't have to do much back-end work.
Another massive plus for Jen was knowing she'd have access to live support whenever needed. No more frustrating chats with bots, just real people ready to help her through any hiccups. In just a few days, Jen had her new system in place. It looked and operated just like Square's, but the best part? She was saving money and enjoying tailored support. On day one, we were at her shop to support any 'just in case' moments.
Could This Be You?
Suppose you're using Square, Stripe, or another aggregator and processing over $15,000/month. In that case, there's a good chance you're overpaying and under-protected.
Take Control of Your Profits: It's Time for a Change
You've poured your heart and soul into building your business; the last thing you need are high fees and frozen funds holding you back. At PayStream, we're here to support growing businesses like yours in making smarter payment decisions that are both secure and tailored to your needs.
Curious about how much you could save? Let us take a quick look at your current setup. It's a no-obligation analysis that is completely free and fast. It might help you keep thousands in your pocket.
Visit www.mypaystream.com or give us a call to kick things off.
You deserve more than just "good enough."
Together, let's find the perfect payment solution for your unique business.
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