Square launches digital loyalty cards for iOS, Android
Square is rolling out new customer rewards features that lets merchants offer in-app loyalty programs and related services.
Square is updating its hands-free Pay with Square app (available for Apple's [NASDAQ:AAPL] iOS and Google's [NASDAQ:GOOG] Android) as well as its Square Register for iPad point-of-sale app to integrate virtual punch cards that track rewards earned by purchases from users' favorite businesses. Merchants can customize the loyalty programs and offer rewards to attract both regular customers and first-time visitors. In addition, Square's in-app reporting tools offer real-time data on sales trends and enable retailers to track inventory as well as customize percentage and dollar discounts for all sale items.
The digital loyalty program is designed to eliminate conventional paper punch cards, simplifying life for merchants and consumers alike, Square COO Keith Rabois told The New York Times. "Those punch cards that you get and stick on your refrigerator and leave behind? On your phone you have one for every merchant you visit," Rabois said.
The original Pay with Square app launched in May 2011 and sidesteps the company's signature mobile payment processing dongle, allowing consumers to make purchases and settle tabs without ever removing their mobile device from their pocket or purse. Pay with Square leverages geofencing technology to identify when a user's smartphone is within 100 meters of a participating merchant--consumers who've opted into the service and attached a credit or debit card to their Square account can automatically open a tab with the retailer and pay for the transaction simply by giving their name. The merchant version of the app also shows the user's photo to guarantee against fraud.
Square Register followed in March 2012, enabling mom-and-pop businesses armed with Apple's iPad tablet to accept cash and credit transactions, customize inventory and issue receipts via text, email or printed copy. According to Square, Register users are five times more active on a weekly basis than Square Card Reader users and process approximately double the revenue.
More than 2 million businesses and individuals are now accepting credit and debit cards via the Square mobile transaction platform, up from 1 million just six months earlier, the startup announced last week. Square added that users are now processing more than $6 billion in payments on an annualized basis. In April, the firm reported annual transaction rates of $5 billion. Square charges a flat fee of 2.75 percent on all transactions and promises users no contracts, monthly fees or hidden costs. It also guarantees merchants access to their funds by the next business day.
The revamped Pay with Square and Register apps could be interpreted as a response to Apple's forthcoming iOS 6 operating system update, unveiled last week. iOS 6 includes Passbook, a new app that stores and updates retailer loyalty cards as well as boarding passes, movie ticket apps and related consumer documents. Some analysts believe Square, rival PayPal Here and other mobile transaction platforms could suffer if and when Apple chooses to incorporate payment functionality into the Passbook service.
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