Square, the San Francisco payment startup run by celebrated Twitter co-founder Jack Dorsey, has equipped more than three million small merchants with its familiar white credit-card swiper attachment that plugs into smartphones and iPads.
The company has had considerably less success getting into larger restaurants and retailers that conduct business with traditional point-of-sale equipment such as the age-old cash register.
On Tuesday, Square unveiled plans to break into that massive segment of the marketplace with its second piece of hardware, called the Square Stand. The white, angular stand is designed to lock onto a checkout counter and snugly display a second- or third-generation iPad running Square’s point-of-sale application, Square Register. The device includes an industrial-strength credit-card reader and has three USB ports that allow it to connect to other point-of-sale devices such as barcode scanners, receipt printers, and cash boxes. “This opens the door to folks who didn’t think Square was for them,” says Dorsey. “This is for bricks-and-mortar folks running high volume stores.”
A swiveling iPad stand, even one as radiantly white and slickly packaged as the Square Stand, may seem a fairly trivial product announcement. But it represents something a bit more audacious than meets the eye. For the last three years, Square has been trying to change the way merchants conduct business by driving down credit-card processing fees and producing software that gives physical businesses the same kind of customer data enjoyed by e-commerce sites. Square’s target is the billion-dollar point of sale market, dominated by NCR (NCR), MICROS Systems (MCRS), and other established payment providers. Along with Square, tech companies such as PayPal (EBAY), Groupon (GRPN), and Google (GOOG) are competing to take a bigger part of real-world transactions, but no one has cracked the market in a significant way.
The challenge has been merchant inertia. Partly this is about the retailers clinging to such old standbys as barcode scanners and receipt printers set up in traditional check-out stands and partly it’s their lingering notion that letting customers pay via mobile devices floating around their stores feels unprofessional. Square Stand is meant to solve all those problems by fixing the iPad into place at the front of the store, and then working with existing peripherals. “It takes the excuses off the table,” says Dorsey.
Meanwhile, Stand can also work for businesses that have already embraced iPads as payment devices but have been forced to come up with their own creative ways to affix tablets into place.
The Square Stand will cost $299 and will go on sale in July on the Square website and in Best Buy (BBY) outlets. (Apple (AAPL), which sells Square’s smaller readers, will not carry the device at launch.) The Stand will begin appearing on the counters of 15 merchants this week, including Blue Bottle Coffee outlets in San Francisco and New York.
One place the Square Stand could eventually appear is in Starbucks (SBUX) stores. The coffee giant invested $25 million in Square last year and its chief executive officer, Howard Schultz, sits on Square’s board. Others have wondered why the rollout of Square technology in Starbucks’s cafes has seemed so slow. Dorsey says Square already processes all of Starbucks’s credit-card transactions in the United States and is experimenting with ways to integrate its hardware into the cafes. He says Starbucks could make a good home for the Square Stand. “They want humans to be able to see their baristas’ eyes and we are working hard to help them with that,” he says.