Square goes after online checkout, shares hit new heights

Square offers bank loans

Square, which made its name with mobile card readers to help merchants accept payments in-store, is now going after the online check-out to do the same for e-commerce payments. The San Francisco-based payments company just launched a new API designed to let developers embed Square’s payment processing platform directly into their app or website. The move pulls the firm into closer competition with the likes of Stripe and Paypal-owned Braintree, which provide the backend payments infrastructure for e-commerce transactions. Square will hope to broaden both its customer base and revenue model to drive the growth potential it talked up during its IPO, as the payments industry is only getting more crowded and competitive. In fact, the move comes as Braintree launches Auth to let merchants using its platform integrate with its partners including Venmo, Apple Pay and Coinbase.

Square’s recent moves, which include getting into the bank lending business, seem to be popular with investors, with the firm’s shares on the New York Stock Exchange now trading at their highest value since the company went public in November.

Square shares

Build With Square

Square’s E-commerce API is part of the Build With Square suite that also includes its Register API, which enables sellers to integrate Square payment processing into their point of sale apps and its being launched simultaneously. The firm says its Register API means any iOS point of sale app can be customised to accommodate specific business needs, enabling merchants to build tools tailored to their check-out needs. The advantage for merchants straddling digital and offline sales channels is that they can capture data across both in one place and analyse their customer behaviour, rather than juggling multiple accounts. For time and resource-squeezed smaller merchants, which are the firm’s core customer base, the appeal is clear.

As consumers spend more online, they also expect to be able to spend more online and it’s incumbent on merchants to be able to offer smooth digital payments process or risk the (still very real) threat of cart abandonment. This isn’t Square’s first foray in e-commerce of course, it also has its Online Store where merchants can build shops to sell their products online. The reason a merchant might be interested in the API option rather than a store is that it gives them more flexibility, with the Store more suited to smaller operations that don’t have the time more money to invest in building their own e-commerce site.

The bigger picture here is that Square is trying to close the loop between offline and online payments. Square wants to be the channel through which all those payments are happening – be they on a computer, in a phone or in a shop.

“Independent businesses have been poorly served by existing commerce solutions, which require them to laboriously piece together hardware, software, and payments services from many different vendors,” says the firm in a blog post. “From payments to point of sale, financing to payroll, we believe all sellers — big or small, online or offline — should be able to start, run, and grow their entire business with one cohesive system.”

Square reader 2


The API launch comes days after the firm announced it will start offering bank loans to merchants through Square Capital. The firm initially started offering cash advances for merchants in 2014 in a bid to diversify its revenue model and push closer to profitability. That move came just weeks after the firm added a new feature to its peer-to-peer payments tool, Square Cash that means customers can now store money inside the app for the first time

Launched in 2009 the firm is now headed up by co-founder Jack Dorsey once again, who is also simultaneously CEO at Twitter.

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