As my colleague, Mercator Advisory Group Senior Analyst Michael Misasi, pointed out in a blog post, there’s very little money to be made offering payment processing services to micro-merchants. The costs simply don’t justify the low volumes and slim margins these transactions offer. This present a problem for companies like Square, for which this segment is their bread and butter.
Now the challenge for them is to move into value added services that build on the payments processing infrastructure they have put in place. An early attempt at this was the now defunct Square Wallet, which tried and failed to get consumers to adopt Square as the gateway through which they could complete their transactions at the point of sale. Now, Square is putting its focus back on its target segment, micro-merchants, through its Square Analytics tool.
This complements its register service and analyzes payment information to give merchants a number of insights into consumer preferences.
Pam Turkin, owner of 17 Just Baked cupcake shops in Michigan and Ohio, determined her most efficient business hours with Square Analytics, according to an article on Market Wired, “When I opened Just Baked in Detroit, I was guessing when customers would stop in for a cupcake. Square Analytics showed that this location’s busiest hour was actually between 4:00 PM and 5:00 PM. We would have closed at 4:00 PM and missed out on sales if not for Square Analytics’ hour-by-hour trends.”
To read the full story, go to Market Wired.