Square goes mainstream (updated link)
We all enjoy disruptive technology as consumers. Developments like Square’s payment system are a perfect example of people realizing “there is a better way to do this” and actually doing something about it. Hey, small business owners, remember the days of those “payment system” companies robbing you right in front of your eyes?
“Yes sir, that will be $2500 for the credit card machine, payable in 100 installments of $25 a month…and we will also be taking 3% of every transaction for VISA/MC and 3.5% for AMEX, thank you”
I was talking to the owner of a local business the other day who told me that he gets a surcharge on every transaction he swipes that is under $10. Wow. It’s (ironically) a small coffee shop – how many transactions do you think are subject to this arbitrary fee?
The “experience” didn’t stop with hefty fees. Good luck getting a live person on the phone to assist with an inoperable machine or a billing issue. Your brand and your revenue stream rests on your ability to take payments via card, and if your machine is down, your world stops….yet you couldn’t hold anyone accountable to meet your expectations as a customer.
Credit cards are such a staple of our everyday purchasing routine, we as consumers expect businesses to accept any and all forms of payment. When they don’t, you kind of look at them funny like “is this a legit operation?” Small businesses need to accept credit cards, so unfortunately, they are taken advantage of in the process. Excuse me for being sentimental, but shouldn’t we be encouraging people to start local businesses, not discouraging them with unreasonable fees on top of unreasonable fees?
Enter Square – eliminate the hidden fees…charge a flat fee for any type of card. Leasing a credit card machine? History. Eliminate the proprietary hardware and associated challenges by making a simple device that works via technology you already own and use every day. Create a vast online knowledgebase where customers can get support immediately. Truly act as a service provider, taking pride in the service you are delivering. As with most technology today, Square is taking the details out of the equation and making it simple – pay us a flat fee, and we will provide the service you require….no fluff.
The deal with Starbucks (SBUX) is a terrific win not just for them and for Square, but for small businesses, consumers, and fans of similar companies who challenge conventional thinking and fix what’s broken. Howard Schultz (Chairman & CEO of SBUX) sitting on Square’s board makes so much sense as it strengthens their credibility in the eyes of other retailers, who certainly are taking notice.
Way to go Square, and way to go SBUX for believing in and embracing disruptive technology.
What’s next? Replacing cash registers with iPads? Equipping everyone at your big box retailer with their own scanner and payment system via iPhone, so you can “check out” anywhere in the store? It’s all coming…and as consumers, our transactions are about to get much easier.
Meet Nick Thomas 
I love this! While perhaps the current square card reader for a business could be a bit more sturdy, as the free ones are a little on the flimsy side. Good for Starbucks for getting smart! I’ve used square for craft fairs and such, and it’s so user friendly. Just setup your account, swipe and the next day, you have money! The hardest part as always, is finding people to give up the plastic! Congrats on FP.
I’m all for guerrilla economics. Americans have bailed out the big banks twice in the past three decades, and we see no sign of reform at that level. The old “too big to fail” mentality continues to thrive, while simultaneously putting the squeeze on Main Street merchants.
The coffee shop owner you talked to echoed comments I’ve heard from other small retailers. One of their problems is that by law they are forbidden adding their own surcharge to cover the difference between cash and credit-card purchases, meaning they actually lose money on some of those under-$10 transactions. As a result, we who use cash wind up eventually paying more. (On the upside, we do retain some privacy from the economy’s Big Brother.)
I’ve also seen the pitches for credit-card collection systems that arrive in our church mail and been appalled at the prices and the assumptions, as well as the percentage they want to skim off of nonprofit donations. In contrast, I’ve seen how the Square has been a great blessing at fundraisers for nonprofits, allowing for easy, quick transactions while allowing the needy organizations to optimize their income. That, too, is a local focus.
Maybe Starbucks is moving us toward a tipping point, where the entrepreneurial upstart takes over. (Don’t forget to look at using local credit unions and savings banks, as well.)
Here’s hoping!
Square Up has been a great product and service for me to use for my personal training business. Oops, you forgot your cash. NO problem. I have another way for you to pay. This is going to be huge for Square Up. I just hope they don’t start to get greedy and charge more in the coming years. Way to go Starbucks for looking at all the possibilities. Square Up must be working on a commercial grade swiper because that little square that I have probably wouldn’t hold up to the amount of swipes that Starbucks gets.
Reblogged this on Khawaja Naveed Haider.
I’m hoping this is a giant chink in the armor of the payment companies that have had a stranglehold on American businesses — and probably businesses abroad, too!
It’s time we stop doing things just because “well, that’s the way it’s always been done”…and this is such a great step in the right direction. It makes me wonder what other disruptive technologies are on the horizon that we haven’t even considered yet.
Fascinating post!
Thanks for teaching me something today! I am considering opening a small business and the acceptance of credit cards was a little frightening due to their high fees. I will bookmark this page 🙂
Awesome post thanks for sharing!
Keep up the great work.
Have a great day!
Cool suggestion for a technological resolution for an ridiculous charge for card transactions. That explains why some small businesses only accept cash. Excellent blog, I really enjoyed your insight. Keep up the good work. Please visit http://www.mynutritioninsight.com for information and disease prevention and healthy food and drink recipes. Add me on Twitter – Mona Lisa.
Thank you for sharing ,i like nice post
this is fuckn cool!!! very very very smart. i worked at a family owned restaurant and honestly, the credit card machine was the worst. so expensive for something that was completely unreliable. plus, when it went down, which was often, we’d be left with irritated customers forced to run down the street to the bank.
for some reason, these machines also seem to only actually work at large scale companies that can afford them no problem. it’s unfortunate.
It’s never a bad thing to have coffee get in our bellys sooner 🙂
Cheers,
Courtney Hosny
I love this, I love the people who have already been using it. When I made an unplanned stop at the farmer’s market, it was great to be able to use my debit card, instead of making a trip to the ATM and back again.
Don’t mistake cool technology as anything but what it is: the end of anonymity through cash and barter. Convenience over freedom…
When your square or your identification-oriented credit or bank card is turned off and you have no cash or no cash exists anymore to counter the technological tyranny of world government banking, you’ll remember this comment. Until then, predictive programming will allow you to dismiss it and me…
realitybloger.wordpress.com
I had never heard of this before but anyway to get coffee faster is always a plus.
It appears that everyone doesn’t participate in the Square program just yet for a reason. Their appear to be ups and downs when it comes to the business owner, consumer, and/or incorporated retailer. To quote more specifically
“There are a number of problems there – from somebody stealing your device to the problem of the drive-by download,” said Chris Hoofnagle, a lecturer at the University of California, Berkeley Law School.
Then it continues to my point of why this blog delivered a pro/for square instead of against – within the same paragraph it says,
“On the other hand, maybe presenting your name and face could reduce skimming risk – of somebody taking your card and copying the information.”
But again, everyone doesn’t participate for a reason. Both pieces, the blog and newstory mention the current issue of the processing fees. So… I’ll leave the continuation of further comment on my own in the event I blog my own on Starbucks on any matter.
this is just a comment from my own thing of looking at the Starbucks thing…
When I first head of Square and found out what it did, that uber-private place in the back of my brain screamed “BAD IDEA”!
Until I see how the Square company deals with potential privacy issues of using a TABLET or PHONE to complete credit card transactions,
Not with a 10 foot pole.
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Faster coffee = happy me 🙂 Thanks for sharing!
thank you
Fantastic post. Very helpful. Thanks for the info.
Great post, Nick. It’s an even more fascinating story when you consider Starbucks itself has the largest retail mobile payment platform.
A big thank you for your post. Keep writing.