Jack Dorsey’s Square aims to make it easier for offline merchants, “who still account for 94 percent of commerce in the world,” to take credit cards and to capture analytical data about their transactions.
Here’s Jack Dorsey, cofounder of Twitter, and the man behind Square, the hot company of the moment:
“On the web, companies use things like Google Analytics to learn how people are interacting, what people are driven to, and why. People use that data to build their businesses. But offline merchants, who still account for 94 percent of commerce in the world, have no real way to capture that kind of data. Square can tell merchants how many cappuccinos they sold for the day. And then they can start mining that data. Like what percentage of people that bought cappuccino also bought biscotti? What happens when it rains? What are my busiest hours? That is critical data that most small businesses just don’t have.”
That’s from a Q&A with Dorsey in the June 2011 issue of Wired. Square’s current service allows anyone to accept credit card payments through a credit card reader about the size of a quarter that plugs into an Android, iPhone, iPad, or iPod touch. According to Wired, the company “has signed up hundreds of thousands of merchants and processed $66 million in transactions in the first quarter of 2011 alone.”
Here’s Dorsey explaining the need he saw beyond that:
“You come into my coffee store and order a cappuccino, and I hit the Cappuccino button on the cash register and see that it’s $3.24. And I take your credit card and type ‘$3.24’ into the credit card terminal. I swipe your card and give you the credit card receipt to sign. Then I take that back and staple it to the cash register receipt and give it back to you, along with your credit card. Then you take back the credit card and throw the receipts away. And meanwhile, at the end of the day I have no idea how many cappuccinos I sold because it’s really difficult to access that information.
“. . . We thought we could do it a lot better. We wanted to make it so anyone could go through that whole process in one download. You put in your name, put in your address, we ship you a reader, and you’re done. And all of that for free. All you have to pay is 2.75 percent per swipe.”
On May 23, the company announced two new products to move these visions forward: the Square Register, and the Square Card Case (right).
Square Register is an iPad app that turns an iPad into a cash register, providing inventory and transaction information along the way.
Square Card Case is an app that allows customers to make payments with their phones by setting up tabs at participating stores. The idea is to be able to buy coffee at your regular shop with one click, as easily as you buy a song at iTunes.
“We want to take away all of this clutter, all of the paper, all of the mess, and get rid of the takeout menu, get rid of the loyalty card, get rid of the receipts, and merge all of this mess and replace it with one clean digital card,” said Dorsey said at the TechCrunch Disrupt conference, where the announcement was made, according to a report by the San Francisco Chronicle.
Mobile payments “are poised to explode,” reports Wired.
“This year, internet-payment giant PayPal expects to process $2 billion in such payments — nearly three times the amount it processed in 2010.”
Or, as Square itself puts it: “Paper receipts are so 2010.”