No longer Square: Pear-shaped payments biz seeks buyer - report Square, the darling of the first-world mobile payments community, is rumoured to be looking for a saviour. Despite having despite having raised huge amounts of cash the company is running out of the stuff. The Wall Street Journal reports that Square has been in abortive discussions about a buyout with Google, Apple and PayPal …
Still no chip and pin? Even in the US the writing is on the wall for swiping: end of 2015.
Almost everywhere in the US already has terminals for reading credit cards (high transaction costs) and the debit card terminals in Europe have much lower transaction fees. The only market for Square was niche and ad hoc (conferences, concerts and the like). It now has to compete with the Bitcoin hype for the hipsters' attention
The comparison with Paypal is flawed because Paypal could exploit the lack of countrywide banking services in the US which have hampered the kind of EFT (electronic funds transfers) that are standard elsewhere. Paypal makes little or no financial sense in Europe, especially since SEPA except for those markets that don't understand how much easier it is just to use standard banking services for money transfer and international trades of where the SWIFT charges are higher than Paypal's.
When square launched a chip and pin card reader for mobile didnt exist, now it does and there is no reason why square cannot move to using a chip and pin reader on the phone.
Additionally 2.7% is cheap as a blended rate, go to Barclays or anyone else as a new merchant and its north of 3% before you walk through the door. Its only when you are an established merchant that you get better terms.
I disagree with your disagreeing.
You can get better rates from smaller vendors like Voice Commerce, but the best deal I got was from stripe.com which was actually chosen because they had the best APIs.
Yes, you do better when you are briks and mortar (my Dad had a kite and fireworks shop and we paid 1.75%) or do huge volumes - a friend's site pays 1.5%.
What I'm not so sure about is how the percentages vary between the US and UK, all of my experience is UK and of course Square is US.
Simon
Merchant rates are always risk based so if you are a small new business with no real trading history or existing merchant account history then you start at the bottom and work up which in the UK typically means pretty high blended rates as opposed to seperate Credit Card and Debit Card rates.
Especailly if you are doing anything aside from vanilla chip and pin with the cardholder present, venture into MOTO and CNP or E commerce and recurring billing and the fees go North faster than Alex Salmond leaving London.
You then also have to factor in settlement terms, any deposit requirement versus risk and the additional charges as well.
You may well be confusing a gprs enabled chip and pin machine as opposed to a chip and pin reader than connects to a mobile device and runs over an App.
I dont recall those being around in 2009 when Square was founded but if you have a reference to a mobile phone attached chip and pin machine from them I would be interested to see it.
absolutely true - just not lucrative.
There are so many different types of payment methods out there now a days that it is just difficult to generalise and gain market share. There are certain methods that are used for certain online genres, like the paysafecard, for example, people like using this for online gaming, but mostly users want ease of payment and dont want to have to think about what is accept where and why isnt it accepted there and what not. Also a big factor is FREE. Payment methods that you have to pay for, except the CC, are definitely not as widely used.
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