Hip to be Square
Square has come a long way in getting mobile businesses to use iPads to accept credit card payment. Plumbing and limo companies have been able to send employees on the road and get customers to swipe their cards on an iPad to pay for services received and goods purchased.
Now Square wants to make similar inroads in the physical retail world. In March, the tech company launched Square Register, an iPad-compatible payment vehicle designed for bricks-and-mortar businesses.
Square Register makes the iPad more than just a payments vehicle. Features include an interactive analytics platform that helps retailers and service companies evaluate and grow their business. At a quick glance, retailers can see basic sales formation, recent transaction history, subtotals, tax, tips, refunds and account deposits. It can also break down sales by month, specific days of the week, time of day -- even size of payments.
Square executives note that many POS terminals and cash registers are expensive, with complicated contracts and subscription fees. Square says Square Register gives merchants everything they need to run their store in a single iPad app.
Included in the register application is Square’s Card Case, a device that enables customers to open tabs at their favorite local businesses. Customers simply tie their credit card payments to the device and are automatically charged for goods and services just by saying their name.
One unique feature of Square Register and Card Case is that there is no upfront terminal fee. Instead, Square charges businesses a rate of 2.75 percent of the purchase price. The amount is the same regardless of card type, and there are no add-ons like activation, annual or monthly fees.
More than one million business people are accepting credit cards with Square, co-founded by Twitter creator Jack Dorsey, and Square has processed $4 billion in sales since its launch in October 2010. Company executives had been reporting the doubling of sales each quarter.
Additionally, while Square had been targeting the U.S. market, the company announced plans last year to begin international sales of its payment services in 2012.
Some industry observers believe the new application might have appeal to small retailers that want a simple transactional device, and some larger retailers that want to supplement their sales terminals during specific promotions.
“I think this would work well with smaller companies that only have one or two registers,” says Andy Schmidt, research director with CEB TowerGroup, a company that researches and advises payment companies. He believes large retail chains and big box companies with large sales volumes are better served by traditional POS systems and cash registers.
“The biggest problem with this option for large retailers is integrating the device to back-end systems if they wanted to tie in loyalty rewards or other information captured by the terminal,” Schmidt says. “This operation might be more complicated for large retailers using the iPad.” But for small mom-and-pop companies, he adds, it’s not a big issue and they can retain most or all of the data needed on the iPad.
As for bigger retailers, Square Register “would work well for a tent sale or other special event,” he says, “especially if you are running the sale in an environment where it is difficult to run a cable to handle additional terminals.”