Wells Fargo Merchant Services has decided to simplify the prices it charges small businesses (SMBs) to accept credit and debit card transactions to compete with startups like Square. According to Bloomberg, the changes are for SMBs that process $100,000 a year or less, getting rid of many of the complicated pricing policies that varied from client to client.
In addition, business customers can apply online for payment processing capabilities with Wells Fargo.
“This is a business and competitive imperative to make the change that we did,” said Danny Peltz, who leads treasury management and merchant services at Wells Fargo. “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.”
Wells Fargo runs its merchant business with FirstData. It is the fifth-largest in the U.S., processing more than $404 billion in 2017. The bank has around 521,000 active merchant locations.
However, the company — and others like it — has been criticized for its complex pricing structures, which can include contracts with dozens of pages of confusing rate tables. With that in mind, startups like Square and Stripe have been able to take advantage of the market by offering easier pricing and more modern hardware.
Last month, Square announced the launch of Square for Restaurants, a fully integrated point-of-sale (POS) platform for full-service restaurants. The service is cloud-based and customizable, allowing managers to update menus and floor layouts remotely across multiple terminals and locations. Businesses can easily manage operations for both the front and back of house.
In May, Microsoft and Stripe announced that they are teaming up to enable integrated payments in Microsoft Outlook. The partnership enables users of Microsoft Office to process invoices and make payments directly within the Outlook portal. The companies noted that payments can be made in more than 135 currencies.
For its part, Wells Fargo formed a tech-payments group led by Avid Modjtabai in 2016 to combine operations, including consumer cards, merchant services and deposit products. It has also been prioritizing payments to connect with customers across business lines.