Someone tell me there's a flaw in my logic.

1. Sign up for Square subscription pricing

https://squareup.com/help/en-us/arti...iption-pricing

2. Pay yourself (or your spouse) $250,000 per year and pay $3300.00 in monthly fees.


Note, you need to have each payment less than or equal to $400 and less than $21,000 per month otherwise you go on the per swipe basis. This comes out to be 1.32 cpm (330000 cents / 250000 miles). Something tells me they will close my account down. Any prior experience with this?

The bad part about this scheme is a possibility that your wife would have to report it as income if it's over $5,000 a year. Trust me if I could I would just use Chase Sapphire and charge it to a restaurant all day lol! 2.14 points per dollar and I value the points higher than 5 cents a piece for the way I redeem it. I would pay the transaction fees without a problem.

Be the guinea pig ...

I wouldn't mess with SQ. They are very picky...i've had money locked up in them before. They will want receipts or a copy of the business transaction if they suspect something. Then they will lock your money up for sometime until you give them a story to unlock it. I stopped using them over a year ago.

Plenty of people have done the Square game in the past, and plenty still do. Yes, some have gotten shut down for what you describe.

They will most likely call and want you to verify your business... especially if you go paying yourself.
And they will call you if you go swiping amex gift cards.

BUT if you establish your business and purpose first. Game on.

I just got locked out, financial review is not fun.

i was just looking at this last night for a business created for non-miles purposes (but with revenues under 250K), and miles opportunities immediately came to mind.

i also want to point out that for non-miles purposes, square is becoming even more attractive in light of the VISA/MC settlement, which should allow merchants to pass square's 2.7% fee to consumers where it's not otherwise prohibited by state law (though IANAL, consult your attorney, etc.). blending legitimate business use with miles-maximization may be a decent way of avoiding problems with square in the long run, especially if you're offering it as an option to customers in a way that customers also pay the transaction costs directly.

square's sign-up page asks for business EIN, last 4 of your SSN, and merchant category info. i'm sure there ways for those aiming to use square for miles to evade hassles and improve the deal's value, including but not limited to using virtual account numbers (though at the higher transaction cost of 3.5% for manually entering a virtual account number, which makes this unattractive), using cards from friends and family, and additionally taking advantage of uncapped category bonuses (5% and potentially up to 6% for those grandfathered) in order to net 3.2%-4.2% at the 2.7% cost or 3.68-4.68% with OP's 1.32% cost by signing up for square as a merchant in certain categories. i'd be curious to hear if anyone has success stories to share along these lines, but please only do so via PM.

without the deal-sweetening strategies mentioned above, the IRS (and potentially state sales tax, where applicable) reporting risk for exceeding an annual $20K (a given) and 200 transaction limit (which is then rate-limiting) is another issue to consider here, in addition to the liquidity problems others have reported. assuming square is paying attention, in order to avoid running afoul of the 200 payment per year IRS limit while still maxing out a $250K fee structure on square, each transaction would have to be at least $1250. this is about 3x the limit for flat-rate pricing with square, so you'd only be able to do up to $79,568.01 in transactions while staying under square's transaction amount limit of $399.99 *and* the 200-transaction limit (199 transactions). but assuming transactions would be cashed out one at a time to minimize the capital at risk if your account is frozen, $399.99 plus whatever you've sunk into the subscription may or may not be a significant amount to risk in square's hands at any one time if you run into snags along the way. however, it's worth noting that the $79,568.01 IRS limit defined by $399.99 transactions and square's subscription limits in only four months (since $21K monthly * 4 months is greater than $80K), for a subscription cost of only $275*4 = $1100.

i suspect that doing 199 $399.99 swipes in four months might draw attention, but if you can operate within those constraints and avoid getting shut down or locked out within those four months, it may be possible to generate 79.5K miles at the slightly higher cost of $1100/(199 swipes * $399.99 per swipe) miles = 1.3819 cpm.

overall, while it does look pretty easy to buy miles at 1.3819 cpm with square, options like AP and VR+BB still strike me as easier/cheaper unless one is willing to take the potentially greater risk associated with larger payment volumes as mentioned by OP. up to $60K, VR+BB still beats this at a net cost of 1.0078381 cpm ($1007.90 initially paid + $7.90 unrecovered cost)/1007.90 miles) vs. the net 1.32 cpm quoted for square by OP and the net 1.382 cpm I calculated for the 4-month, $80K scenario needed to stay under both the 200 transaction and $400 limits. and up to $12K/year multiplied by the number of AP accounts under your control, 0% is hard to beat as a counterfactual for everyday spending miles/points. that doesn't make this a bad deal--far from it--but i still think it's ultimately less compelling than other opportunities widely discussed here--at least without additional strategery to improve the value proposition, if VRs are unavailable to you, etc.

does anyone know if square pulls D&B business credit reports if you provide square with an EIN? also, does anyone know whether square uses the last 4 digits of your SSN for soft pulls on personal credit reports, and if so which bureau they pull?

Why bother with any of this when there are cheaper alternatives?

Depends if whether you are a heretic or a cardinal. I'm sure the cardinal had loads of fun! As MRP20 is likely to find out.