Mobile payments firm Square is now processing USD11m worth of mobile payments per day, more than doubling its capacity since hitting the USD4m daily milestone in August, as consumer and merchant adoption continues to climb. Notching up a USD1bn valuation in its latest funding round, the growth marks an impressive year for the firm, having launched only last year. The news indicates that there is increasing demand for the firm’s plug-in card-reader device despite the hype surrounding NFC services in the mobile payments space. Recently pulling in a “multibillion” dollar investment from Richard Branson, the firm is looking increasingly powerful against rivals such as Google in a market expected to be worth USD15bn by 2016.
Square CEO Jack Dorsey, who also founded micro-blogging site Twitter, says that users approach both services as utilities that they can mould for their own purposes. “We haven’t defined a lot of how people are going to use them…We don’t want to make Square all about taxi cabs and we don’t want to make Twitter all about celebrities and politicians,” he says, speaking at the Techonomy conference.
Square recently upped its offering by making hands-free transactions possible via its ‘Card Case’ service, an app that allows users to set up virtual tabs with certain merchants. The firm will be hoping that the move, aimed at building up loyalty between the merchant and the customer will counter concerns over privacy and security, considered the primary barriers to mainstream adoption of mobile payments.
“It is a communication medium between the business and the consumer,” says Dorsey, who criticises near-field communication (NFC) “wave and pay” services for impersonality. “NFC only gives the merchant the identity [of the consumer] after the transaction,” he says.
The firm says it has shipped more than 800,000 card readers to businesses already, with these latest figures indicating that the US firm is on course to hit targets of processing more than USD2bn in mobile payments annually before long.
Square’s success in the mobile payments market comes despite some analyst scepticism regarding its physical credit card reader. Near-field communication (NFC) technology is championed by some commentators to become the global standard in mobile payments, with many firms pursuing the format, most notably Google, which recently launched its NFC-based wallet service, while MasterCard, American Express and PayPal are all targeting the space.
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