They say all revolutions start out small. Jack Dorsey’s Square is no different.
It started off with a modest card reader, turned into a little app and now the company has developed and launched Square Stand, a point of sale system that reinvents the idea of cash register with help from Apple’s iPad and Square’s software, allowing the San Francisco-based company to further spread its wings in the payments business. And if there were any doubts that the company was going after payments incumbents such as NCR and Verifone, Square Stand puts it to an end.
The company announced the Square Stand at an event in a coffee shop near its offices this morning. Square Stand, simply put, is a point of sale system that allows merchants (big and small) to plug in their iPads (2 or 3, but not the 4th generation) into a stand that comes with a swivel base (so they can turn it around for you to sign for your purchase), a credit card reader and a USB hub that can in turn allow merchants to plug in everything from a scanner to a printer (for printing receipts), a cash register (the Square Stand doesn’t hold cash, just works with other devices) and even the backend ordering system into the stand. In February this year, Square introduced its Business-in-a-Box package, but this is a much simpler and is targeted at larger establishments including restaurants.
When asked why the company was making the initial device with support for only the iPad 2 and iPad 3, Dorsey pointed out that a majority of their customers were using these two devices and as a result they had to make sure they provided the biggest support. The support for iPad 4 (the newest model available, sold as just “iPad”) will come in subsequent models. The company had launched Square Register for iPad app in March 2012 and has made subsequent upgrades to the app.
Sexy cash registers?
“We have taken something that is ugly and mechanical and made it look like a consumer product that is very sexy,” said Dorsey, chief executive of the four-year-old Square, which is based in San Francisco and has raised $340 million in funding from the likes of Khosla Ventures, Citi Ventures, Starbucks, Visa and Chase. The company is part of a growing number of players including eBay and GroupOn that are looking to reinvent the offline retail business.
Square showed off its grander ambitions when it hinted at its desire to take on the likes of Foursquare and Yelp. Square said that as of today it is processing over $15 billion in payments on an annualized basis, excluding Starbucks, up from processing $5 billion on annualized basis a year ago.
Weighing in at about five pounds, the stunningly beautiful device is pristine white and is made of moulded plastic. The USB and other accessories (called the Toolkit) are perfectly matched to the stand. It will used by 13 merchants in 30 locations. The package is going to cost $299 and and is available for pre-order.
When I first saw the Square Stand, it elicited an involuntary gasp. From packaging to the final product, it is something one would expect from the Apple dream factory; but in saying so, I don’t do justice to Dorsey and his design team. While there are many companies who are following the Apple aesthetic, to me Square Stand represents a perfect harmony of hardware, software and service. (For more on beautiful design of connected devices make sure to check out our RoadMap event in November in San Francisco; to get early access to tickets that will go on sale this Summer go here).
Digital receipts and mobile payments are the way of the future, but Square also recognizes that people pay with cash and credit cards, the company said at the press conference Tuesday morning. The support for third party peripherals will make this into an ecosystem. It will be on sale in July at Best Buy and other retailers.
Do small merchants care enought about how their point-of-sale devices look and will they spend money to replace their existing systems? “More important than how it looks is how it works. It is about making it work simply,” Dorsey said Tuesday.
Completing the sale
The Stand has been under development at Square for quite sometime. Dorsey said that reinventing the register and rethinking the whole retail experience has been part of company’s thinking from its earliest days. If the Square’s original card reader made it possible for mom-and-pop businesses to access the credit card payment infrastructure, with the launch of this device, Square can start to look at tapping into the big brick-and-mortar commerce ecosystem.
“Whenever people got Square (Register) on iPad, the first thing they needed was a stand. So we made one, and one that works seamlessly in a way that allows merchants to move people through the queue really quickly,” Dorsey said. “We wanted to build hardware that was high quality.” The speed of processing payments has been a key driving force behind the design of this device, Dorsey explained.
Square is one of the handful of companies that understands that there is a lot of money to be made in building this new kind of retail system. And it might have started out small, but now it doesn’t have much choice to get real big, real fast. After all it has to live up to is massive $3.25 billion valuation.