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Location, location, location: Square’s favorite new toy is proximity

Square has been fiddling with the concept of the basic retail transaction for years, but lately it’s taken a keen interest in location and proximity tools to help streamline and trigger purchases. The basic idea is to use your location relative to a merchant or a potential payee as a context for your transaction, whether you’re ordering a cup a coffee or splitting a tab at a restaurant.

On Wednesday Square launched a new feature on its Square Order app that makes heavy use of geo-fencing. You can place a standing order for your morning coffee and bagel at your favorite cafe, but instead of picking it up at a set time everyday, your proximity to the coffee shop triggers your order. When you’re five minutes away from it, you cross a geo-fence that sends an alert to the coffee shop telling it to start brewing your mocha latte.

Photo: Thinkstock / Lightwavemedia
Photo: Thinkstock / Lightwavemedia

When you arrive, you find the barista putting the finishing touches on the drink, and instead of paying at the register you simply grab the cup and walk out the door. At that point, a second geo-fence surrounding the building will trigger the credit card transaction that pays for your order. High-end coffee joint Blue Bottle has already implemented the feature in the Bay Area.

But geo-fencing isn’t the only tool Square is tinkering with. It’s been experimenting with Bluetooth Low Energy as a proximity sensing tool. We’ve already seen BLE in retail stores in the form of beacons, sending you marketing offers and other information as you move through the building. But Square is using BLE as a method of detecting when other Square users are nearby.

On Tuesday Square also updated its Square Cash iPhone peer-to-peer payments app so users can send money to other Square users in the same room, without entering a phone number, email address or searching for a name in contacts. Basically, all of the Square Cash apps in the same room detect one another, allowing you to transfer money with a single click.

Source: Square
Source: Square

So far, there are a limited number of use cases for these proximity features. Square only offered up one example for Order’s new geo-fencing – your morning coffee – though it’s not hard to imagine it expanding to, say, restaurant reservation systems: when you’re parking the car, the restaurant starts readying your table.

In the case of Square Cash, hyperlocal networking seems like a nifty way to split a check or give money to someone you just met without entering contact details. But for now it’s far too dependent on everyone involved in the transaction not only being a Square Cash user, but also owning a later-generation iPhone running iOS 8.

Square has also experimented with location features in the past that fizzled out. One of the key selling points to Square Wallet was that it used your location to check in to a business, but Square canned Wallet earlier this year.

I am curious to see how far Square takes the technology. Geo-location (i.e., where you’re located on a map) and relative location (your proximity to other people, things and places) could be used to trigger all kinds of transactions.

Instead of standing in line at a movie theater, you could just walk in and have Square charge you for the movie you actually see, displaying your ticket on your screen for any usher that asks. Instead of using a smartphone to get past the turnstyle at a train station, geo-fencing could determine what stop you get on at and at what stop you exit, charging you the appropriate rate for the trip. Using proximity sensing it could tell whether you sit down in the first class car or in coach, and adjust your ticket price accordingly.

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