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To Sign Merchants Nationwide, Square Heads to Campus To Recruit a Sales Force
January 31, 2012


Square Inc. is quietly assembling a part-time sales force of college students nationwide who will be entrusted with finding local merchants that would use Square as their payment processor. The development may mark a major change in the way that Square, which has benefited from a huge amount of free publicity, books merchants for its payment service that caters to very small businesses and individuals who sell goods and services part-time.

San Francisco-based Square posted a notice for a “Square U Representative” position last month on its Web site and has put out reminders about it this month through Twitter as well as a feature story about it on its Facebook page. The job posting indicates the position is in San Francisco, but adds that positions also are available “in cities and towns across the U.S.” The posting says reps would work nine to 15 hours per week. Jobs would last six months, but the terms of “high performers” could be extended.

In addition to developing a “keen understanding” of Square’s brand and long-term vision, major duties of the Square U reps are to “grow Square usage and activate new Square users in your community” and “engage with local businesses, casual retailers, and managers of business associations,” the notice says.

A spokesperson for Square declines to discuss the initiative, saying by e-mail that, “the Square U program is actually fairly new and hasn’t really kicked off yet.”

Founded in 2009 and headed by Twitter co-founder Jack Dorsey, Square recently claimed to have 1 million merchants in its fold. Although some had experience accepting cards through other merchant acquirers, many acceptors are brand-new businesses or individuals who only occasionally sell things but want to be able to accept credit and debit cards in addition to cash. They can do that by using Square’s downloadable software and cube-shaped card reader that plugs into the audio jack of Apple Inc.’s iPhone or iPad, or a smart phone running Google Inc.’s Android operating system.

Payments consultant Cherian Abraham, principal analyst at Drop Labs in Richmond, Va., says the addition of the college students is significant because Square, with Internet superstar Dorsey as its chief executive, has found so many merchants through word of mouth or as the result of innumerable media stories. The company has directed most of its sales efforts at national retailers to distribute its readers, he says. “They’ve been able to create their own market,” Abraham says. “Now they’re ready to step it up, create a sales force and go after larger game.”

While inexperienced in business, the college students could be effective at selling Square acceptance to merchants near campus because of Card Case, Square’s mobile wallet, according to Abraham. Card Case enables a Square merchant to pull up an enrolled smart-phone user’s photo for authentication. The consumer gives his name, and the transaction is charged to the card he has linked to his Card Case account. The user then receives a text receipt. Square recently added a geo-location feature to the wallet and as of late 2011 had signed up 20,000 merchants to accept Card Case, according to a news report.

“It’s going to resonate very well with the gadget audience. You’ll see a clear momentum there in having Card Case on those phones,” and that in turn will help attract merchants, Abraham says. “The merchants who would actually be more amenable to using this would require more face-to-face interaction with their customers.”

The end result could be that the students start signing a significant number of merchants that already accept cards. That not only could take business from the merchants’ incumbent processors, but also cause these merchants to substitute the Square reader for their traditional point-of-sale payment terminals, according to Abraham. Card Case, he notes, enables a Square merchant “to know that a customer who has been in my store five times in a month is back. There’s nothing in the POS infrastructure that exits today that makes any of that possible.”

But a source in the terminal industry who asked not to be identified scoffs at that idea. “Why would a merchant place a key, if not predominant, part of their revenue stream in the hands of a part-time, transitory workforce?” he says by e-mail. “These merchants will have to acquire an iPhone or Android phone or other device, which costs money.” And Square’s 2.75% discount rate for swiped transactions  “can add up to big bucks” compared with the pricing merchants could get from traditional independent sales organizations, he adds. “You can't simply swap out a terminal for a dongle,” he says.


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