Last week, Square announced a partnership with Starbucks to provide back-end payment processing and CRM for the coffee mega-company. Today, Square brings news of the other end of the business spectrum. Small businesses who make less than $250,000 per year will no longer have to pay the standard 2.75 percent per swipe processing fee (though they can still opt for this) if they pay one flat rate, currently set at $275 monthly.

If a small businesses chooses the flat rate option, they’ll essentially end up paying 1.3 percent per swipe – a significant savings if they meet the criteria. IF the business goes over the line, they’ll be charged the standard per-swipe rate.

This is Square making sure that it can have as many users as possible, from super corporate giants to small mom and pop shops with a bit of tech savvy.

“For 62 years, merchants have suffered complicated, expensive processing fees,” said Square CEO Jack Dorsey in a statement today. “Square is the first company to rethink electronic payment pricing with the merchant in mind. We are giving merchants affordable, predictable pricing…With one monthly price, merchants know that the sales they’ve processed in a day is the same amount deposited in the bank.”

According to TechCrunch, Square has been trying to support smaller merchants for a while now, with next-business day fund availability. Contrast that to competitors like PayPal’s two to five business day turnaround and you can see how Square is making headway in a competitive field.

Square has also dropped transaction limits for new users. Before the change, Square held funds over for new users who brought in over $1000 in a week. This is no longer the case; all new businesses that use Square’s mobile card reader for Android or iOS will have all of their funds available in their bank account by the following business day. Square also no longer charges a flat per-transaction fee, further differentiating them from other credit card merchant processing services.

This move to drop transaction fees and percentages puts competitive pressure on similar services, like PayPal, who have their own payment processing system and mobile credit card swiping dongle. PayPal still charges a flat rate of 2.7 percent per transaction, no matter how large or small the business is.

• SourceTechCrunch