Launched in 2010 by Twitter creator Jack Dorsey, Square is best known for its mobile payment platform. Plugging the company’s thumb-sized reader into any iPad or smartphone audio jack turns the device into a credit-card reader, allowing for cheaper point-of-sale card payments with Square keeping 2.75% from any transaction.
Now Dorsey has launched Square Market, an online marketplace aimed at getting businesses of all stripes selling online.
Speaking to Wired magazine at Square’s San Francisco headquarters Dorsey said: “Our mission is to make commerce easy. That doesn’t mean ‘make offline commerce easy’ or ‘make online commerce easy.’ It’s commerce in general.”
"There's a blurring of the lines between offline and online commerce," said Dorsey. "This is the next obvious step for us."
Square’s target audience has always been small and local businesses, and the new Market is a clear continuation of this. Without online support small retailers can only ever be successful in a limited area, Square Market aims to fix this.
As with Square’s payment platform Square market will take a 2.75% cut on each item sold, but it’s difficult to give an immediate comparison with other online markets. In the US Amazon charges 99 cents per item, but also include a referral fee described as an “applicable percentage of the item price”.
Where Square Market will hope to win customers will not be by undercutting rates, but by offering better services. Businesses will be able to open a storefront for free, and provide in-built sharing options for customers via social networks.
Analytical tools to help merchants diagnose where their business succeeds fails will also be on offer, though Market will not do everything - with shipping left to the responsibility of the seller.
Whether Square Market will catch on is very much an open question, as Square’s mobile payments have had only measured success in the US. The company handles payments for only a single national chain (Starbucks), but did post more than $15bn annual payments in May this year.
And as to the question of whether Square will ever come to the UK it seems a long way off. The majority of US cards use magnetic strips (making them swipeable) whilst in England (and much of the rest of Europe) the Chip & Pin system is the norm.
Converting Square to accept the new standard would take a massive influx of capital – something that no-one would accept to happen whilst the US market is still being fought for.