Square - Team E

What is it: Square Reader, or just Square, as it’s known to consumers, is a credit card reader that plugs into a merchants Android and Apple iOS operating systems. The credit card reader works in conjunction with an app called Square Register. It provides business owners with the ability to accept credit card transactions in a multitude of locations; from in-store retailers to farmer’s markets to house calls. Square brings flexibility and mobility to the traditional business context. The merchant simply has to plug the 1 inch reader into their device’s standard 3.5mm headphone jack and begin swiping credits cards (see picture) [1]. There is no limit to the number or amount of payments taken, and customers receive an email confirmation when deposits are made, so there is no need for paper receipts. As of now Square is available in Canada and the United States. 

Another aspect of Square is the Square Wallet app (see pictures below). Square Inc. describes the application as “a wallet that holds credit and debit cards, half-punched loyalty cards, wrinkled cheques, and ancient receipts.” Customers download the app, register with any business on the Square directory, enter credit card details, and they’re good to go. When they walk into a store, such as Starbucks, they show their face, confirm their name, then simply order as usual, and the charge is applied to their “virtual tab.” This is all works due to the fact that Square Wallet  uses near field communication (NFC). “At its core, all NFC is doing is identifying us, and our bank account, to a computer. The technology is simple. It's a short-range, low power wireless link evolved from radio-frequency identification (RFID) tech[nology] that can transfer small amounts of data between two devices held a few centimeters from each other,” explains Jamie Carter on TechRadar [2]. On the business end, Square Wallet works with the Square Register software. Square Register is capable of receiving payments from smartphone users utilizing the Square Wallet app [3].

Security: Square technology is PCI-DSS (Payment Card Industry-Data Security Standard) Level 1 compliant. Level 1 is designated to companies that process over 6 million transactions annually [4]. When swiping cards, the data is fully encrypted, using industry-standard methods when stored on disk or transmitted over public networks. Information processing is also secured by regular updates of the system, restrictive firewalls between networks, and not storing card information on the devices [5].

 Customer View of Square Wallet

 Merchant View of Square Wallet

Relevance: Square Reader has “simplified [her] business,” [6] stated Tara Bushmiaer from Quarter Salon in Atlanta, Georgia. This is especially true for small businesses like hers. People carry cash less and less, and are relying on credit cards to make purchases. Katie Steckman of Sanctuary Print Shop in Austin, Texas no longer has to invoice her customers because with Square she can “take payment on the spot” [7]. Square makes it simple and affordable for small businesses to provide credit transactions for their customers. Cash and cheques can be a nuisance since they have to be taken to the bank and those transactions recorded separately. “The beauty of Square is that with each transaction they’re automatically deposited into the bank the next day and then accounted for on my bank statement automatically,” states Drew Nash of 1 to 1 Pediatrics in Danville, California [8]. As well, Square is completely portable and therefore works well for mobile businesses (see Boccalone Gets Paid With Square [9] below).

Square Wallet is also very beneficial for both customers and businesses. It is an extremely fast, easy, and simple way to make transactions. “[Customers] don’t have to carry their credit card with them, and their in and out. We can see their name, we can remember who they are, and we get that real personal connection with them that way,” comments Tyler Lafferty of Method Juice Cafe in Spokane, Washington [10]. The Wallet helps businesses build relationships with their customers which is essential for their success, especially for small businesses. In the US, the ratio of smartphones to feature phones is nearly 1:1, with the majority of them using either iOS or Android [11]. By offering customers the ability to use Square Wallet, businesses will be able to connect with a very large customer base.

 [11]

One other great aspect of Square is that it’s “very easy to train [employees],” states Julie Bench of Cornbelly Corn Maze in Lehi, Utah, “we did it within an hour” [12]. Her husband, Logan Bench, further commented that “running a seasonal business is always a challenge [be]cause you have to train your employees every year” [12]. The use of smartphones and tablets has become second nature to the majority of North Americans, making training on Square’s system simple and cost effective.

Acquisition: Square was created by Jack Dorsey, one of the creators of Twitter [13]. He co-founded the company Square Inc. which provides the payment service launched in 2010 [citation needed]. When purchasing Square, your first Reader is free (including the app and shipping), as well as all additional Readers when bought over Square’s website. It is possible to purchase Square in certain retail stores for $10, however they come with a $10 redemption code so in fact are also free. Square Inc. enrolls merchants in their simple standardized per-swipe pricing plan which has no merchant account, monthly fees, or setup costs. Each transaction is 2.75% per swipe for Visa and Mastercard (in Canada; other cards accepted in the US), and 3.5% + $0.15 per manually-entered card [14]. Payments are automatically deposited into merchants bank accounts, and transactions made during business hours are usually available in their accounts the next business day. 

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Bibliography:
1. "Square Reader," Square Inc. accessed March 1, 2013, https://squareup.com/ca/reader

2. Jamie Carter, What is NFC and why is it in your phone?”, TechRadar, January 16, 2013, accessed March 3, 2013, http://www.techradar.com/news/phone-and-communications/what-is-nfc-and-why-is-it-in-your-phone-948410.

3. Brian X. Chen, “Square Bundles Cash Register Equipment Into One Package,” Bits (blog), February 20, 2013, accessed March 3, 2013, http://bits.blogs.nytimes.com/2013/02/20/square-bundles-cash-register-equipment-into-one-package/.

4. “Merchant PCI DDS Compliance & What Is PCI Compliance?” Visa Inc., accessed March 3, 2013, http://usa.visa.com/merchants/risk_management/cisp_merchants.html.

5. “Security Across Many Levels,” Square Inc., accessed March 3, 2013,

https://squareup.com/security/levels.

6. “The Quarter Salon Gets Paid With Square,” YouTube video, 1:01, posted by “square” on March 5, 2012, http://www.youtube.com/watch?v=3_Gq-PXwRLM.

7. “Sanctuary Print Shop Uses Square,” YouTube video, 2:34, posted by “square” on April 4, 2012, http://www.youtube.com/watch?v=rshOLdC97d8.

8. “Dr. Nash Gets Paid With Square,” YouTube video, 1:03, posted by “square” on March 5, 2012, http://www.youtube.com/watch?v=Zv1wFlFatA4.

9. “Boccalone Gets Paid With Square,” YouTube video, 1:07, posted by “square” on February 14, 2012, http://www.youtube.com/watch?v=ub10xQrZlH0.

10. “Method Juice Cafe uses Square Wallet,” YouTube video, 1:30, posted by “square” on October 24, 2012, http://www.youtube.com/watch?v=D2blzzJoOdE.

11. Greg Sterling, “Pew And Nielsen Say Smartphones Now 50 Percent, When Will ComScore Join The Club?” Marketing Land, March 29, 2012, accessed March 1, 2013, http://marketingland.com/pew-and-nielsen-say-smartphones-now-50-percent-when-will-comscore-join-the-club-8979.

12. “Cornbelly's Gets Paid with Square,” YouTube video, 1:47, posted by “square” on October 31, 2012, http://www.youtube.com/watch?v=BPN6pJuBv2o.

13. Jessica Guynn, “Square taps into the mobile payment business,” Los Angeles Times, February 1, 2013, March 1, 2013, http://www.latimes.com/business/la-fi-square-dorsey-20130201,0,5416478.story.

14. “Simple Pricing from Square,” Square Inc., accessed March 1, 2013, https://squareup.com/pricing.

Images

Unless otherwise noted, all images are from Square website, https://squareup.com/. 

Podcast Bibliography
1. “Square Wallet,” Starbucks Corporation, accessed March 2, 2013, http://www.starbucks.com/coffeehouse/mobile-apps/square-wallet.

2. Ellen McGirt, “For Making Magic out of the Mercantile,” Fast Company (blog), accessed March 3, 2013, http://www.fastcompany.com/most-innovative-companies/2012/square.

3. “Simply Revolutionary,” Square Inc. accessed March 2, 2013, https://squareup.com/ca/pricing.

4. Tim Schufelt, “Prediction: You’ll tap-to-pay with your phone in 2013,” Canadian Business, January 30, 2012, accessed March 1, 2013, http://www.canadianbusiness.com/technology-news/death-of-the-wallet/.

5. Mark Bonchek, “The Future of Commerce Starts With a Tap,” Harvard Business Review Blog Network, January 16, 2013, accessed March 1, 2013, http://blogs.hbr.org/cs/2013/01/the_future_of_commerce_starts_with_a_tap.html.

6. Roger Chen, “Starbucks aims to take Square, digital payments mainstream,” CNET, August 8, 2012, accessed Febuary 28, 2013, http://news.cnet.com/8301-1035_3-57489171-94/starbucks-aims-to-take-square-digital-payments-mainstream/.

7. Marina Strauss, “Starbucks rolls out smart phone payments in Canada,” The Globe and Mail, September 6, 2012, accessed Febuary 28, 2013, http://m.theglobeandmail.com/technology/tech-news/starbucks-rolls-out-smart-phone-payments-in-canada/article1359893/?service=mobile.

8. Philip Parker, “Square Review,” Credit Payment Option, April 28, 2011, accessed March 2, 2013, http://www.cardpaymentoptions.com/credit-card-processors/square-review/.

9. Rajan Sodhi, “Researchers expect rapid growth in m commerce,” Peer 1 Hosting, November 13, 2012, accessed March 2, 2013 http://www.peer1.ca/industry-news/researchers-expect-rapid-growth-m-commerce.