I get the feeling that what Square is doing now is just a glimpse of their greater plan. They have a proven ability to execute and release polished products that are enjoyable to use.
Nearly everyone I every need to pay is on Square Cash (and those who aren't soon are, the barrier to signup is very low) and the app is just a pleasure to use compared to the competition. It's second nature at this point.
Square Wallet was a big dud, as was the Starbucks partnership. That was their "greater plan" at one point.
Square Cash is easy to use.. but operates at a structural loss of over 20 cents per transaction.
There's plenty of issues when you look past the surface, particularly with the business model. They have not yet delivered a polished product that's enjoyable to use and makes lots of money.
Agree. Not to mention Square doesn't exactly have a monopoly on "making useful things that users love", not by a long shot.
If "proven ability to execute and release polished products that are enjoyable to use" is the bar for a high valuation and optimistic projections, we should maybe start throwing gobs of money at a lot of design firms and app consultancies.
> They have not yet delivered a polished product that's enjoyable to use and makes lots of money.
The small business I work for recently switched to Square Register via an iPad and the Square Stand for all POS and it's pretty brilliant. It's a big step up from using a phone plus the regular little reader, and setup and use are quite simple even for our tech-illiterate employees. Judging by the popularity of the related receipt printer and cash drawers on Amazon, we're far from the only ones to make this jump recently.
I don't know how much money they're making per $100 stand, but they've made the barrier to a modern flexible POS system so low that I'd be surprised if their share of the payment processing pie isn't growing quickly.
It's not the stand they make money on, it's the 2.75% payment processing rate. That is higher than what competitors charge (closer to 2%), and as business grows that can add up to a significant premium. That is what drives them off of Square. So there's a kind of glass ceiling there.. to keep those customers Square would need to renegotiate a lower rate that trims down their gross margin.
Square does have a really good niche in the mom-and-pop shops where 2.75% is an ok price given the easy of signup and free POS system. But at the same time there may be significant customer acquisition and support and fraud costs in that niche.
Also nobody would use Square Cash over a plain bank transfer for a domestic (or more generally fee free through their bank) transfer, rationally speaking? PayPal have a product that is good enough unless you do such transfers really often to care enough, do they change something fundamental or are they left literally competing on fees with PayPal?
I disagree that PayPal is good enough. To receive money via PayPal you have to link your bank account which takes verification and can be a PITA. Square Cash "refunds" it directly to your debit card. You just type in the number. It's also usually easier than using your bank's EFT interface to send money.
However this debit mechanism is also what makes it so expensive for Square to operate (>20 cents per transaction in interchange fees).
Completely on point - I don't think people realize the scale you need to achieve to make money in the credit card fee transaction business. Billions and billions are required. To me the more interesting question is who will buy them.
What did you like about it? I forced myself to use it a bunch but in the end felt it didn't save me any time over swiping and signing.
By the time you unlock your phone, open the app, wait for it to locate you, check in, say "hey i'm paying with square my name is x", wait for the cashier to scroll down and find you (sometimes you take a few seconds to show up), and wait for them to tell you you're good to go... it's really at best neck-and-neck with swiping and signing. At worst, slower and more awkward. Auto check-in was super unreliable.
Apple Pay on the other hand is going to be a significantly faster way to pay (no signing/PINs) and also vastly more secure (no real card numbers!). Two real concrete benefits.
The goal could still be to get as many Square POS systems onto the market so that a competitor (ie. Amazon) can't just waltz in and start expanding aggressively.
Square Cash, Square Capital, Square Market, Square Stand, Square Register, Square Reader. Add the recent Caviar acquisition to the spaghetti on the wall.
I prefer it a lot more. Maybe it's just my circle of friends, but we laugh at how stupid Venmo's Facebook spam is and generally prefer how easy Square Cash is to use. Since the money ends up right back on your debit card, it's a lot easier than maintaining a Venmo balance and having to deal with that.
I signed up for Venmo a while back to try their API at a hackathon. They then decided to freeze my account and send me a barrage of questioning. I didn't bother.
Square cash has absolutely zero friction - you can download the app on your phone and be sending payments to other people in a matter of minutes, without needing to know anything other than their phone number.
On top of that, Square Cash is instant - there's no paypal balance to deal with, it doesn't take 2-3 business days for the ACH deposit into your bank. When I square cash my friend $50, it's in his account and out of mine before our conversation is over.
venmo feels like its trying to be a facebook app, broadcasting payments, etc. I want the app im using to send money and nothing else - cc square from a normal email is so much less intrusive.
Big potential in the added services Square will provide to SMEs. On top of reporting, I think they've already floated the idea of feedback through digital receipts.
I'd definitely imagine that improved customer feedback mechanisms would impact SMEs in a positive way.
Nearly everyone I every need to pay is on Square Cash (and those who aren't soon are, the barrier to signup is very low) and the app is just a pleasure to use compared to the competition. It's second nature at this point.