Square’s approach has gained traction with some 800,000 micro-merchants. Now it’s hoping to accelerate uptake with consumers through an upgrade to its Card Case application. The app lets consumers pay via the card linked to their Square account at Card Case accepting merchants. The consumer simply walks up, says “put it on my tab. My name is Anna Smith,” and the merchant looks up the customer, views a photo of the customer for authentication, and the transaction is done.
The latest version of Square’s payment app, Card Case, includes something called “automatic tabs”, which uses the location-based technology of iPhone iOS5 to detect when users have arrived at or near a venue, such as a coffee shop. If the merchant is also using a Square application, the buyer can simply say his or her name to pay for the coffee. The updated Card Case application also includes Twitter integration, through which business owners can see reviews and comments from customers.
Square is doing an exceptional job leveraging mobile and Internet technology and business models. By giving both the consumer and the merchant increasingly useful software, it makes the Square proposition increasingly difficult to dislodge in favor of a competitive offering. Square disintermedidates the traditional merchant service sales channel.
Looking ahead, it’s no stretch to imagine that Square will encourage those Card Case users to attach their Square accounts to their DDAs instead of their cards. That takes a page out of PayPal’s book.
Read the Slate article for more color from the consumer point of view. While the details of the story are useful, the main takeaway for those in the payment industry is the following. The willingness of consumers to try new payment methods and how vulnerable old reliables like “top of wallet” and card branding are when the payment is embedded, not explicit, in the transaction experience.