When Square launched a few years ago, it came to market with a very compelling value proposition: Give everyone the chance to process credit card transactions. It turns out that has become a pretty useful tool for small businesses and individual merchants: Square is now processing about $4 billion in payments per year.
But that was the easy part. Now Square is giving small vendors the tools to make intelligent decisions with the same sort of inventory management, sales data and analytics their larger competitors have. And it has the potential to make an even greater impact than the initial payment processing piece had made.
Over the past several decades, we have seen the wholesale destruction of mom-and-pop shops, as small businesses have watched customers flee and take their business to larger retail chains. But it’s not just that they couldn’t compete on price; it’s that they were unable to compete on inventory management. Things cost more not only because small businesses didn’t have the scale to purchase at the same volume as larger competitors but also because for many of them, inventory management was expensive and inefficient.
With the launch of Square Register, the startup is looking to change all of that. It is seeking to democratize business intelligence, allowing anyone to set up a point-of-sale offering without having to make a huge up-front investment. It is creating a more level playing field for the little guy, for the mom-and-pop shop, for those who otherwise couldn’t afford the kind of business analytics the big retail chains took for granted.
Sure, it’s easy to view Square’s latest product as just an easy way for it to sink its claws deeper into potential customers, especially as competition heats up in the payments space. The big guys like MasterCard, Visa and American Express aren’t just sitting idly by while Square takes a chunk out of their processing business. They are aggressively pushing near field communication and building their own payment apps in response.
But I think there is something else going on here. Watch Jack Dorsey’s interview with Om from last year’s GigaOM RoadMap. This is a guy who loves the local artisanal coffee shop (Sightglass Coffee), who roots for small businesses like Earnest Sewn jeans that build quality products. He really wants to give those businesses the tools to make them work and succeed.
“Something like Square allows anyone who wants to start a business to start it immediately and get information about how the business is doing so that they can grow it,” Dorsey said onstage last year. Looking at Square Register, you can actually see that vision in action.