Wells Fargo simplifies payments pricing to compete with Square
Wells Fargo will simplify the prices it charges small businesses to accept credit and debit card transactions as the bank responds to pressure from startups such as Jack Dorsey’s Square Inc.
The changes, which are tailored for small businesses that process $100,000 a year or less, eliminate many of the complicated pricing policies that varied from client to client, according to Danny Peltz, who leads treasury management and merchant services at the company. Business customers will also be able to apply online for payment processing capabilities with Wells Fargo, Peltz said.
“This is a business and competitive imperative to make the change that we did,” Peltz said in an interview. “This industry is going through some structural changes — not withstanding anything that’s happening at the bank — and that’s driving our decision-making more so than anything else.”
Companies that process credit and debit card transactions for business customers have faced criticism for their complex pricing structures, which can include contracts with dozens of pages of lengthy and confusing rate tables. Startups such as Square and Stripe Inc. have been grabbing market share by offering easier-to-understand pricing and sleeker hardware.
Wells Fargo has pushed to accelerate innovation since forming a tech-payments group led by Avid Modjtabai in 2016. The unit combines operations including consumer cards, merchant services and deposit products, and has been prioritizing payments as a way to connect with customers across business lines.
Wells Fargo jointly runs its merchant acquiring business with First Data Corp.
The bank's new fees are 2.6% plus 15 cents for a tap, dip or swipe, or 3.4% plus 15 cents for a keyed-in transaction.