Word is spreading quickly among small US businesses hustling to thrive in tough economic times — hip young Internet payment service Square will give them an edge.
The brain child of Twitter co-founder Jack Dorsey, Square lets anyone take credit card payments using smartphones or iPad tablet computers.
Barely one year old, it is used by 750,000 merchants and handles US$2 billion in transactions annually, chief operating officer Keith Rabois said.
The San Francisco-based startup is aiming to snag the 26 million US businesses that do not accept credit cards and is planning to expand outside the US next year.
Square charges a 2.75 percent fee, on par or lower than merchants would be charged per transaction if they went directly through credit card companies, but has the advantage of no set up costs.
“Square increases the prospect of closing a sale,” Rabois said. “In a tough financial time, we make it easier. We remove a lot of the pain from starting a business and growing a business.”
Rabois believes Square can eliminate the need for cash registers, eventually letting people run small businesses almost entirely from iPads using inventory, billing and other features in software.
The company was named after the small, square magnetic-strip readers plugged into smartphones or iPads to allow people to swipe credit cards. It feeds credit card information to free Square software and avoids the need to rent or buy credit card processing equipment.
A Square Card Case application at the iTunes store even lets people run tabs at businesses and pay using just their names.
“You can get a massage, bicycle to the farmers market and never have to pull out the credit card,” Rabois said.
Making it easy to begin taking credit card payments has been a boon for small businesses from sole operators based at home to brick-and-mortar shops.
Massage therapist Joey Garcia credited Square with being the reason that his client list is double that of a classmate even though both set up businesses around 18 months ago.
“Since I’m a private practitioner most people think I’m only cash and check,” said Garcia, the sole employee of Urban Therapy. “When I tell people I take credit cards also, that changes the whole conversation.”
The 37-year-old Apple gadget fanatic uses an iPad to take payments as well as track business finances with Square software.
“When I go to houses, take out my iPad and swipe a card they think it’s the neatest thing,” Garcia said of the reaction he gets to Square.
Customers who pay using Square get digital receipts sent to them by e-mail or text messages.
Miki Nishihata began using Square in his Hello Bicycle shop in Seattle after it was recommended to him by a hair stylist.
Before that, he opted not to take credit cards because of the expense and hassles such as signing contracts and needing a telephone line.
“Square is very new or small business friendly,” said Nishihata, who opened his shop three years ago. “The learning curve is nothing; anyone can do it that has a smartphone.”
He did not contain his dislike for traditional commercial payment services and “primitive” technology such as receipt printers and desktop credit card machines.
Nishihata has gone from dealing completely in cash to 90 percent of his sales being paid by credit cards.
“We’ve sold dozens of bikes that are US$600 and people don’t usually carry that much money,” he said. “When people have plastic, people will buy basically anything.”
Luis Morales of Humble House Foods in San Antonio started a Square trend at traditionally cash-based farmers markets.
“I was the first to take credit cards and everyone else caught on,” Morales said.
Since starting to use Square late last year he has seen holiday season sales jump because being short on pocket money no longer stops people from buying Humble House pesto, tapenades, hummus and other spreads.
Morales and his wife plan to redesign their Humble Foods farmers market booth in the weeks ahead with influences from Square and consumer electronics giant Apple.
Tables and tent walls will be removed and all sales conducted using Square on iPads, Morales said.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by