Square, Inc.

From Wikipedia, the free encyclopedia
  (Redirected from Square (payment service))
Jump to: navigation, search
This article is about the electronic payment service. For the video game company, see Square (company).
Square, Inc.
Type Private
Founded 2009 (2009)[1]
Headquarters San Francisco, United States[2]
Area served United States, Canada, and Japan
Founder(s) Jack Dorsey
Jim McKelvey
Key people Jack Dorsey (chief executive officer)
Jim McKelvey (chairman)
Sarah Friar (chief financial officer)
Industry Mobile Payments, Point of Sale
Products Register, Order, Market, Cash, Capital, Feedback, Reader, Stand
Website squareup.com
Alexa rank positive decrease 5,548 (April 2014)[3]
Launched May 2010

Square, Inc. is a financial services, merchant services aggregator and mobile payments company based in San Francisco, California. The company markets several software and hardware products and services, including Square Register and Square Order. The company was founded in 2009 by Jack Dorsey and Jim McKelvey and launched its first app and service in 2010.

Square Register allows individuals and merchants in the United States, Canada, and Japan to accept offline debit[discuss] and credit cards on their iOS or Android smartphone or tablet computer. The app supports manually entering the card details or swiping the card through the Square Reader, a small plastic device which plugs into the audio jack of a supported smartphone or tablet and reads the magnetic stripe. On the iPad version of the Square Register app, the interface resembles a traditional cash register.

Square Wallet, before it was removed from the Apple App Store and Google Play Store in 2014, allowed customers to set up a tab and pay for their order by providing their name (or a barcode) using a stored credit, debit, or gift card.

In August 2012, Starbucks announced it would use Square to process transactions with customers who pay via debit or credit card. In February 2014, Whole Foods Market announced it would use Square Register in select stores' sandwich counters, pizzerias and coffee, juice, wine and beer bars.[4]

In March 2014, Square announced it will start allowing sellers to accept bitcoin on their own storefronts through Square Market. The seller will take no risk on Bitcoin value fluctuations.[5]

In November 2014, Square announced it will start accepting payments via Apple Pay in 2015.[6]



The original inspiration for Square occurred to Jack Dorsey in 2008 when Jim McKelvey (a St. Louis friend of Dorsey at the time) was unable to complete a $1,000 sale of his glass faucets and fittings because he could not accept credit cards.[7]

The name "Square" refers to the Square card readers which are square in shape. The name also refers to the idiomatic term for settling debts: "squaring up". Several other names were also considered but rejected, including squirrel, stash and wallet. The name Squirrel was in use during a meeting the company had with Apple, wherein Scott Forstall, SVP of iPhone Software, informed Jack Dorsey he should change the name.[8][9]



Square Reader[edit]

The Square Reader was the first product released by Square, and is used to accept credit card payments by connecting to a mobile device's audio jack. Square's original reader consisted of a simple read head directly wired to a 3.5mm audio jack, through which unencrypted, analogue card information was fed to smartphones for amplification and digitization.[10] Square's technology is PCI compliant and Verisign certified.[11]

In April 2011, rival payment company VeriFone claimed that the Square system at the time was insecure, and that a "reasonably-skilled" programmer could write a replacement app which could conceivably use the Square device to skim a credit card and return its details, because the first Square reader did not encrypt track data in hardware. VeriFone posted a demonstration video and sample skimming app to its Web site.[12] Dorsey called VeriFone's claims "neither fair nor accurate", noted that the card data could be gathered visually from the card, and said that the claims ignored the fraud protection provided by card issuers.[13]

Square now uses strong encryption on its devices, including SSL and PGP.[11] Its cryptographic keys are at least 2048 bits in length.[11] Card numbers, magnetic stripe data, or security codes are not stored on Square client devices.[11] Square follows the guidelines issued by OWASP.[11]

In July 2014, Square announced a card reader that would accept chip cards, ahead of the October 2015 EMV liability shift. This new reader supports traditional magnetic stripe card transactions as well as chip and signature transactions. [14]

Square Stand[edit]

Square Stand at a coffee shop turned around for the customer to choose a tipping option.

In June 2013, Square unveiled Square Stand at a press event at Blue Bottle coffee in San Francisco. Square Stand aims to turn the Apple iPad into a more complete point of sale system. It makes use of a larger reader and a rotatable base that allows the stand to be swiveled around. Square Stand took more than a year to develop and the team of around 15 was led by Jesse Dorogusker former Apple director of engineering for iPhone, iPod, and iPad accessories at Apple.[15] The Square Stand works with iPad 2, iPad 3rd generation (30-pin connector), and iPad Air (lightning).


Square Register[edit]

Square Register is point of sale software aimed at replacing traditional credit card terminals and cash registers.

Square Market[edit]

In July 2013, Square launched Square Market which allows sellers to create a free online storefront with online payment processing functionality.[16]

Square Cash[edit]

In October 2013, Square launched Square Cash, which allows person-to-person money transfer over e-mail. The service allows users to send money by drafting an e-mail, including the dollar amount in the subject of the e-mail, and CC'ing Square Cash, initiating a transfer directly to the recipient's debit card.

Square Capital[edit]

In March 2014, Square launched Square Capital, offering business financing to merchants using Square. In contrast with a traditional loan, there is no time limit for a merchant to pay off a Square Capital cash advance.

Square Order[edit]

In May 2014, Square launched Square Order, which allows users to make purchases in advance and pick them up at a predetermined time. The app replaced Square Wallet. The transaction fee for orders placed in the app is 8%, whereas Square's normal transaction fee is 2.75%.[17] It replaced Square Wallet, which Square discontinued, removing it from the App Store and Google Play in favor of Order,[18] on 12 May 2014.[17] In March 2015, Square announced that it was shutting down Square Order by March 20.[19]


Introduced in early 2010 by Square Inc.,[20] the Square application is available for the iPhone, iPod Touch, iPad and Android-based mobile phones.[21] Square was co-founded by Twitter creator Jack Dorsey.[20] Dorsey also serves as chief executive officer and Sarah Friar serves as chief financial officer.[20]

Square has more than 1000 employees.[22]

At the TechCrunch Disrupt conference in May 2011, Square announced the release of two new apps, Square Card Case (later rebranded as Square Wallet[23]) and Square Register.

Square's office is located on Market Street in the South of Market neighborhood of San Francisco.[24]

On August 4, 2014, Square confirmed that it’s making a move into the food-delivery market by announcing the acquisition of startup Caviar, a startup that delivers meals from high-end restaurants.[25]

Areas served[edit]

Square has been available in the United States since 2010 and became international when the company launched in Canada at the end of 2012. In May 2013, Square announced that its mobile payments service was available in Japan after agreeing to a partnership with Sumitomo Mitsui Card Corporation. The fee for transactions would be 3.25% in Japan.[26]


Square received angel investment from Marissa Mayer, Edward W Cramer, Kevin Rose, Biz Stone, Dennis Crowley, Shawn Fanning, MC Hammer, and Esther Dyson.[27] Since then, it has raised several additional rounds of funding:

The company's valuation in October 2014 was $6 billion.[28]

Business model[edit]

As of March 2013, Square provides its card readers to its users for free.[29] The Square app is also freely downloadable from the App Store and the Google Play Store.

Square charges a fee of 2.75% on every credit card transaction. This rate is higher than the rate charged by conventional credit card processors[citation needed], but Square claims that the conventional credit card processors also include many hidden costs which are never disclosed to the customers. Square does not have any additional fees beyond the 2.75% per swipe (or the 3.50% plus $0.15 cost per manually-entered transaction) - there are no monthly fees or set-up costs. Square claims that its costs are, on average, lower than the costs charged by the conventional credit card processors.[30] Square is regarded as a useful app for entrepreneurs, including for example consultants, food truck operators, and traditional retailers.[31]

Square charges $99 for its Square Stand point-of-sale product.

As of May 2014, Square charges sellers 8% on every pickup transaction made when buyers use Square Order.[32]

As of May 2014, Square charges sellers a monthly fee of $10 to use Square Feedback, which provides a private channel of communication between sellers and their buyers using the digital receipt.[33]

Swiped payments are deposited directly into a user's bank account within 1-2 business days. In some instances, Square may withhold payments to its users pending issues related to chargebacks.[34]

In July 2014, Square announced that they were developing a chip and pin reader with an expected release date of early 2015.[35]

On November 21, 2014 Square founder Jack Dorsey announced that Square would add support for Apple Pay sometime in 2015.[36]

Customer support[edit]

Square's support is handled via phone, email, YouTube videos, a Twitter feed and an online help center.


In the media[edit]

Business Insider praised the product for its "ease of use, simplicity and elegance". Business Insider favorably compared Jack Dorsey with Steve Jobs for what they call his "entrepreneurial vision and charisma".[37][38] The Next Web praised Square's website squareup.com for its design and aesthetic appeal.[39] The product was also showcased at Apple's iPad 2 event.[40] GigaOM called the product a disruptive innovation.[41]

Customer feedback[edit]

It is to be noted that customer feedback is very diverse at the current state with a strong tendency to the negative. Positive reviews especially commend the ease of use and availability to the majority of devices. Most negative complaints emerge from an unsatisfying customer support. The main reason for inquiries originate from suspended accounts with money on the hold due to alleged illegal business which infringes against Squares terms. The website "cardpaymentoptions.com" states that "[t]he majority of the complaints fall into three areas: virtually nonexistent phone support, misunderstanding and nondisclosure of its former $2,002 card-not-present deposit hold policy, and reports of random fund holding or account deactivation exceeding 30 days with no explanation or communication from Square."[42] On its website it counted over 1200 complaints alone. Other websites add to the picture showing a vast amount of negative to very negative critics and reviews.[43][44]

Banned transactions[edit]

In May 2013, Square announced it would no longer allow firearms-related transactions to be performed using its devices or software. Founder Jack Dorsey amended the terms of service for retailers to ban sales of "firearms, firearm parts or hardware, and ammunition; or ... weapons and other devices designed to cause physical injury". He denied that this move was related to the increased debate over gun control.[45]


  1. ^ "BusinessWeek company profile". 
  2. ^ "Contact Us". 
  3. ^ "Squareup.com Site Info". Alexa Internet. Retrieved 2014-04-01. 
  4. ^ Whole Foods signs on to use Square
  5. ^ Protalinksi, Emil March 31, 2014. TheNextWeb "Square now lets sellers accept Bitcoin on their own storefronts"
  6. ^ "Square will soon accept Apple Pay". money.cnn.com. November 21, 2014. Retrieved November 21, 2014. 
  7. ^ "Square Brings Credit Card Swiping to the Mobile Masses, Starting Today". fastcompany.com. May 11, 2010. Retrieved September 19, 2011. 
  8. ^ "Square’s name and design were changed by a lunch at Apple". thenextweb.com. Retrieved September 19, 2011. 
  9. ^ "Square Was Almost Named Squirrel Until Dorsey Talked To Apple". pulse2.com. May 26, 2011. Retrieved September 19, 2011. 
  10. ^ "Inside the Square Reader". Protean Payment. 
  11. ^ a b c d e "Square - Security". Squareup.com. Retrieved September 19, 2011. 
  12. ^ Hsu, Tiffany (March 9, 2011). "Square's mobile credit card reader easily hacked, says VeriFone". Los Angeles Times. Retrieved March 11, 2011. 
  13. ^ Olivarez-Giles, Nathan (March 10, 2011). "Square answers VeriFone's accusations on security of mobile credit card reader". Los Angeles Times. Retrieved March 11, 2011. 
  14. ^ Marcus Wohlsen (July 30, 2014). "Square Bets Big on Next-Gen Credit Card Tech". Wired. 
  15. ^ Terdiman, Daniel. “At Square, an obsession with the 'magic' of hardware design”, CNET, 13 Jun 2013.
  16. ^ "Square Market". 
  17. ^ a b Del Ray, Jason (12 May 2014). "Square Finally Gives Up on Square Wallet and Bets on New Order-Ahead App". Re/code. Retrieved 12 May 2014. 
  18. ^ "Square Order". Square, Inc. November 2, 2014. Retrieved November 2, 2014. 
  19. ^ "Square is shutting down Square Order". VentureBeat. March 13, 2015. Retrieved March 23, 2014. 
  20. ^ a b c "About Square". Square Inc. Retrieved March 15, 2011. 
  21. ^ Mark Milian (May 11, 2010). "Square begins taking orders for free credit card reader". Los Angeles Times. Retrieved May 14, 2010. 
  22. ^ a b Square Inc. (2014-12-18). "Square A milestone: We’re now 1,000 employees strong.". Linkedin.com. Retrieved 2014-12-18. 
  23. ^ Harrison Weber (June 13, 2013). "Square Wallet for iPhone gets redesigned with a visually-driven UI and streamlined payments". The Next Web. Retrieved March 11, 2014. 
  24. ^ Evangelista, Benny (October 14, 2013). "New offices give Square workers lots of options". SFGate. Retrieved January 6, 2014. 
  25. ^ "Square orders in, buying food delivery startup Caviar". Fortune. August 4, 2014. Retrieved August 4, 2014. 
  26. ^ Davies, Chris (23 May 2013). "Square mobile payments go live in Japan". Slash Gear. Retrieved 2013-05-23. 
  27. ^ a b c d "crunchbase.com". crunchbase.com. Retrieved September 19, 2011. 
  28. ^ Rao, Leena (October 5, 2014). "Square Closes $150 Million Round At $6 Billion Valuation". Tech.fortune.cnn.com. 
  29. ^ "Free Credit Card Reader". Retrieved July 25, 2012. 
  30. ^ "Square - Pricing". Squareup.com. Retrieved September 19, 2011. 
  31. ^ Lesonsky, Rieva (July 25, 2012). "7 Essential Apps for Entrepreneurs". 
  32. ^ "Square Pickup Pricing". May 13, 2014. 
  33. ^ "Square Launches 10 per month Customer Feedback Tool". May 13, 2014. 
  34. ^ Fast deposits intoyour bank account. (2013-06-25). "Square Merchant Agreement". Squareup.com. Retrieved 2013-12-05. 
  35. ^ Chowdhry, Amit. "Square Overhauls Reader To Support Chip-Based Credit Cards". Forbes. Retrieved 21 November 2014. 
  36. ^ Petroff, Alanna. "Square will soon accept Apple Pay". CNN. Retrieved 21 November 2014. 
  37. ^ Dan Frommer (June 7, 2011). "Jack Dorsey, Apple CEO? Probably Not". businessinsider.com. Retrieved September 19, 2011. 
  38. ^ "Is Jack Dorsey The New Steve Jobs?". simplyzesty.com. June 2, 2011. Retrieved September 19, 2011. 
  39. ^ "Function is nothing without beauty: 10 sites doing it right". thenextweb.com. July 10, 2011. Retrieved September 19, 2011. 
  40. ^ Leena Rao (March 2, 2011). "Square Now Processing $1 Million In Mobile Payments Per Day". techcrunch.com. Retrieved September 19, 2011. 
  41. ^ "Jack Dorsey on Square, How It Works & Why It Disrupts". gigaom.com. December 1, 2009. Retrieved September 19, 2011. 
  42. ^ "Square Review". cardpaymentoptions.com. October 31, 2014. Retrieved November 2, 2014. 
  43. ^ "Square Review, Rates & Fees". cardfellow.com. November 11, 2013. Retrieved November 2, 2014. 
  44. ^ "Square Review". merchantmaverick.com. August 8, 2014. Retrieved November 2, 2014. 
  45. ^ Sperry, Todd (2013-05-13). "Mobile-payment service Square blocks gun sales". Money.cnn.com. Retrieved 2013-12-05. 

External links[edit]