Digital Transactions Authoritative, insightful and timely information for payments professionals
The mysterious Square Inc. payment service made a name for itself Monday by joining a somewhat exclusive club of companies to offer the first applications for Apple Inc.'s iPad notepad computer within a couple of days of the iPad's much-hyped April 3 debut. Square also revealed its pricing. San Francisco-based Square surprised some observers by going straight to the iPad before coming out with a payment application for Apple's popular iPhone and Google Inc.'s Android mobile-operating system, which the acquiring and tech communities had been expecting since the tightlipped Square announced its existence four months ago (Digital Transactions News, Dec. 3, 2009). Apple says about 1,000 applications for the iPad are available, with many more coming soon from third-party developers. In contrast, the iPhone has about 150,000 apps available through Apple's iTunes App Store. Many of the iPad apps come from newspaper, magazine, and book publishers, which are looking to boost flagging sales with new electronic distribution on the iPad's easy-on-the-eyes screen. In setting up shop in the iPad's App Store, Square beat some of the iPhone's merchant-processing stalwarts such as PayPal, though PayPal parent company eBay Inc. already is out with an iPad app. A quick Digital Transactions News review on Monday showed that at least one other merchant-processing app is ready for the iPad?Inner Fence LLC's Credit Card Terminal. That program was one of the first apps to turn the iPhone into a mobile card-accepting terminal for small businesses (Digital Transactions News, Jan. 5, 2009). Meanwhile, Aria Systems Inc. says it will offer an iPad release of its software-as-a-service system for managing recurring billing and subscriptions. Reviews of Square's app on the iPad site ran the gamut, with several praising its ease of use. But others criticized Square for going straight to the iPad, bypassing, at least for now, the iPhone and handsets running Android. Square founder Jack Dorsey, who co-founded Twitter, seemed to acknowledge that sentiment in a Twitter post on April 4. “IPhone & Android users: we haven't forgotten you,” the post says. A Square spokesperson did not respond to a Digital Transactions News request for comment. Meanwhile, Square publicly disclosed its merchant pricing in the information posted with the iPad app. The card-present rate is 2.9% and the card-not-present-rate is 3.5%. Square says it charges no setup, monthly, or transaction fees, and no merchant account or contract is required. George Peabody, director of the Emerging Technologies Advisory Service at Mercator Advisory Group Inc., surmises that Square's pricing indicates the company, in going after very small mobile merchants, is positioning itself against traditional merchant acquirers serving wireless merchants rather than against online specialists such as PayPal or Amazon.com Inc.'s Amazon Payments. “It's really competitive,” he says. “I'm surprised at how low it is.” Square's Web site indicates a card swipe, which attaches to the headphone jack, and sticker to adapt the iPad for card-present transactions will be available. The terms of service indicate Square works with a “payment processor of record,” but its identity is not revealed. While aimed at small merchants, the Square service has also been intended from the start to enable person-to-person payments between individuals, allowing the product to work for consumers as much as for merchants. Square's application enables users to send receipts to customers via e-mail and text message.
