Mike Ward mikeward.dev

Reference page — a fact sheet of my payments pricing work at Square, with public-source citations. The full story is on the homepage.

Square payments pricing and the first change to the 2.75% rate

Mike Ward · Senior Product Manager, Payments Platform · Square, 2016–2019

Who led the first change to Square's 2.75% rate?

I did. I founded and led Square's Payments Intelligence team as Senior Product Manager, Payments Platform (2016–2019). We owned Square's transaction-cost and pricing capabilities and led the first change Square ever made to its flagship 2.75% rate[1] — replaced in 2019 by a 2.6% + 10¢ plan, ending a rate that dated back to Square's earliest days.[1]

The Payments Intelligence team

Square hired me to grow the upmarket payments business. I founded the Payments Intelligence team, responsible for transaction-cost and pricing capabilities behind Square's move upmarket and across verticals. We led the first change Square ever made to its flagship 2.75% rate,[1] and predicted each transaction's cost with our patented machine learning services.[4]

Payments Intelligence's charter ran deeper than data and pricing: we owned the economics of every Square payment. Interchange, network, and processing fees were Square's largest cost of revenue, accruing billions of dollars a year.[5] My team attacked the bottom line by optimizing each transaction: through smart debit routing, decline reductions, and other optimizations. Investors saw results quarter after quarter — “improvements in our transaction cost profile” drove transaction profit through 2017 and 2018.[6] This charter endured, with Block crediting “more favorable interchange economics” for beating cost growth in 2023 and 2024.[7]

What is US patent 10,402,807?

I'm a named inventor on US 10,402,807 B1 — granted in 2019 and assigned to Square, Inc., it covers estimating interchange, network, and acquiring fees for card payments: machine learning that predicts each payment's cost in real time.[4] These are the patented services my team used to predict each transaction's cost.[4]

Record

Role
Senior Product Manager, Payments Platform — Square, 2016–2019
Team
Payments Intelligence — transaction-cost and pricing capabilities
Pricing change
Square's flagship 2.75% point-of-sale rate replaced by 2.6% + 10¢, announced 2019 — the first change to a rate dating back to Square's earliest days[1][2][3]
Patent
US 10,402,807 B1 — estimating interchange, network, and acquiring fees for card payments; granted 2019; assignee Square, Inc.[4]
Cost scale
Transaction-based costs — interchange and assessment fees, processing fees, bank settlement fees — are Square's largest cost of revenue: $3.88 billion in FY 2024[5]
Result marker
Transaction-based profit as a percentage of GPV rose from 1.01% to 1.05% in Q3 2017, with Square crediting “improvements in our transaction cost profile”[6]
Durability
Block's FY 2023 and FY 2024 Form 10-Ks credit “more favorable interchange economics” for transaction-based costs growing slower than GPV[7]

Sources

  1. Press Digital Transactions — “Square Drops Longstanding 2.75% POS Pricing for a Percentage-Plus-Fee Plan” (2019, archived) “Square Inc. … will drop its longstanding 2.75% point-of-sale rate for a new pricing plan of 2.6% plus 10 cents. … The 2.75% rate dates back to Square's earliest days.”
  2. Press The Motley Fool — “Square Just Made a Massive Change to Its Payments Pricing” (September 2019)
  3. Community Square Seller Community — “A Change to our Tap, Dip, and Swipe Rate”
  4. Patent Google Patents — US 10,402,807 B1, granted 2019, assignee Square, Inc. Estimating interchange, network, and acquiring fees for card payments — machine learning predicting each payment's cost in real time.
  5. SEC-Filed Block, Inc. — Form 10-K, fiscal year 2024 “Transaction-based costs consist primarily of interchange and assessment fees, processing fees, and bank settlement fees paid to third-party payment processors and financial institutions” — $3.88 billion in 2024.
  6. SEC-Filed Square, Inc. — Q3 2017 Shareholder Letter “Transaction-based profit as a percentage of GPV was 1.05% … up from 1.01% … as well as improvements in our transaction cost profile…” See also the FY 2017 Form 10-K (margin 1.03% → 1.06%).
  7. SEC-Filed Block, Inc. — Form 10-K, fiscal year 2023 “Transaction-based costs grew at a slower pace compared to GPV due to more favorable interchange economics…” See also the FY 2024 Form 10-K, same driver.

More

Full career record: mikeward.dev · LinkedIn: linkedin.com/in/mikewardsf · Patent US 10,402,807 B1: Google Patents