Square's annual payment volume eclipses $15B, led by iPad transactions
Square is now processing more than $15 billion in payments on an annualized basis, up from $10 billion six months ago. The figure excludes transactions completed by coffeehouse chain Starbucks, which began allowing consumers to pay for purchases via the Square Wallet application for iOS and Android late last year.
Square credits the growth surge to increased adoption by brick and mortar merchants using the m-commerce platform as a full point of sale system. The firm's Square Register application, introduced in March 2012, enables mom-and-pop businesses to accept cash and credit transactions, customize inventory, integrate loyalty programs and issue receipts, all via (NASDAQ:AAPL) iPad. Square notes that iPad customers now represent nearly 50 percent of total payments processed across its platform--in addition, the average payments volume processed by tablet users is more than double the average volume of their smartphone counterparts.
Square is capitalizing on its tablet momentum by rolling out Square Stand, new iPad-optimized hardware designed to complement Register. Square Stand features an integrated, secure card reader that connects to accessories like receipt printers, kitchen printers, cash drawers and barcode scanners. More than a dozen U.S. small businesses will begin conducting transactions via Square Stand today--the hardware will go on sale to all merchants on June 8, priced at $299.
More than 2 million U.S. businesses and individuals use Square services, including its signature Card Reader, which enables merchants to swipe credit and debit cards through a dongle plugged into iOS devices as well as Google (NASDAQ:GOOG) Android smartphones and tablets. Square charges a flat fee of 2.75 percent on all purchases, lower than conventional credit and debit card transactions, and it promises no contracts, monthly fees or hidden costs. Funds are deposited into customers' bank accounts within 24 hours on average.
Square recently revealed it is building a recommendation engine that suggests nearby places to visit based on the consumer's mobile transaction history. "We can tell you that people who like X might also like Y--and it's a true representation of what you've bought," Square Director of Discovery Ajit Varma told The Verge. While other apps and services recommend places to eat, drink and shop based on check-ins and other social media interactions, Varma contends that payment data is a more accurate representation of consumer preferences, in part because its Wallet application records transaction information automatically, without the buyer or seller taking any extra steps.
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