Square’s Focus on Data and Design is Their Biggest Advantage in Their Mission To Rule Commerce
Mike Isaac of the New York Times recently wrote about Square, the payments company founded by Twitter founder Jack Dorsey, and its subsequent move from primarily a payments company to more of a small businesses solutions company.
I’ve always been a fan of Square, largely because of its audacity to start a company focused on helping local merchants, and because of its product-visionary founder. It’s had its bumps along the way, there’ve been issues about management made publicly, and there are others who claim that it’s simply a small margin business, but I maintain bullish on it for simple reasons: data and design.
Square’s first product, which is a card reader dongle that enabled iPhones to be a point-of-sale, was transformative for local merchants. Anyone can basically set up shop in an instant. I still remember having my card swiped through a Square reader for the first time at a small bubble tea place in UMass and going, “Wow.” I pondered about security for a moment, but the whole concept of a smartphone being a cash register fascinated me and felt like I shouldn’t resist the future.
But today, that product is not so original anymore. There are multiple point of sale systems for mobile devices, namely ShopKeep, Rebel, Lavu, Breadcrumb, PayPal, and even Etsy. But Square’s strength, is its first-mover advantage. They took a lot of capital risk early on by offering the Square Reader initially for free, and the tradeoff is they charge by taking a percentage from the transactions. They introduced Square Stand in 2013, making the iPad a complete point of sale, and subsequently broadened their lineup by offering inventory management, invoices, and analytics along with their original application in Square Register. That early push has helped them expand to multiple types of businesses, gaining them troves of data about the way these business are ran, and through the millions of transactions that go through their system on a daily basis.
E-commerce and online marketplaces are booming today for sure, but our day to day is still spent interacting with people in the real world. There are tons of successful local cafes and restaurants, privately owned gyms, home repair services, and other small businesses that can gain value not just with point-of-sale, but through other means. That untapped potential is where Square is banking on.
They have Square Capital designed to help finance underserved businesses. They acquired Caviar in 2014, a startup that takes care of delivery for restaurants, which reportedly has tripled its orders and doubled its headcount six months after the purchase. Recently, they also started offering free chargeback protection for US and Canadian sellers, ramping up on removing common hassles from small businesses. In addition, they just acquired Kili Technology, a hardware company focused on simplifying and optimizing payment processing, a move undeniably an answer to Apple Pay. In a blog post they wrote (emphasis mine):
The payments landscape is changing faster than ever — from EMV to NFC — and we know that major technology shifts often leave small businesses behind. Our job is to continue to make the smartest and sexiest payments hardware on the planet accessible to them.
Smart and sexy. Data and design focused on small businesses. And no other payments company is more positioned for this than Square, which not only dares to improve the hardware and the software side of payment processing, but also the financing, peer-to-peer, and overall user experience of small business transactions for both sellers and buyers.
This grand re-focusing feels like a resurgence, and while they have big challenges ahead of them, this can just be the defining factor in what makes Square successful in their mission “to make commerce easy for everyone.”
Originally published at TheBadPrince.com. You can follow me @TheBadPrince.
