Mobile payments company Square is moving online with the launch of a web-based marketplace aimed at local vendors of everything from clothes to beauty products as the company attempts to boost the number of payments it is handling. CEO and founder Jack Dorsey says ‘Square Market’ is aimed at helping small neighbourhood merchants that do not have the means to build their own site, but want to distribute their wares globally. The move highlights not just the increased blurring of offline and online e-commerce activity, but Square’s growing threat to the likes of Amazon and Etsy, as well as chief mobile payments rival PayPal.
“We’re discovering more and more than businesses don’t like to be called small, but local,” says Dorsey. “We’re bringing the simplicity of Square to the web.”
The move is a logical next step for San Francisco-based Square as it seeks to mature its business beyond payments and increase its footprint beyond the US. Tying its payments platform directly into e-commerce makes sense for the company as it looks to boost revenues, with US online retail sales projected to be nearing USD300bn annually in two years’ time. Not only is the market booming, but there is still plenty of room for growth, with e-commerce still only making up around 6% of overall retail sales, according to Forrester. The firm will not charge businesses to list goods, but will take a 2.75% commission on any sales.
Local Commerce Opportunity
With research suggesting nearly three quarters of offline purchases take place within a five-mile radius of their own homes, local commerce provides a potentially massive revenue opportunity for Square. Although Square has spread its wings recently with high-profile partnerships like Starbucks, it is small local businesses that make up the company’s backbone and that are driving the company’s growth. This means Square is not starting from scratch as it rolls out the new service, because its relationships with hundreds and thousands of businesses means it has a ready-made audience to offer its new service to as it takes on big players like eBay. The firm already helps tiny merchants and enterprises process payments on mobile and its new initiative is designed to rope all of these independent businesses under a single e-commerce hub.
“Square Market makes local businesses accessible to customers down the block and across the country,” says Square director of discovery, Ajit Varma.
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