This post originally appeared at Open Forum. Square, the mobile credit-card processing application, has been growing like crazy. It handled the equivalent of $6 billion a year in payments as of June, and with major corporations like Starbucks now using the platform, that number may easily double—and continue to grow exponentially.
Why is it so popular?
Basically, Jack Dorsey—CEO of Square and co-founder of Twitter—created an application that is mobile, easy to use and kills the middle man.
Although the device is already available at behemoth retailers—Apple, Wal-Mart, Best Buy, RadioShack and Target—the company recently announced that Square readers will also be sold at AT&T stores for even greater exposure.
The reader costs $9.99 in stores, but there’s also a $10 redeemable credit with each purchase, so making the switch to Square’s payment system is basically free for business owners.
“This is the road to the extinction of the cash register,” Richard Feinberg, professor of consumer sciences and retailing at Purdue University, tells Dana Hunsinger Benbow at the Indianapolis Star. “We have just gotten on the highway and not yet reached 65 miles per hour, but it will happen—sooner rather than later.”
Though Square is not ideal for doing bulk transactions, there are clear advantages for many small businesses. We spoke with two small business owners who pointed out some advantages of Square for them.
1. Eliminating the middle man. “Before, we had to go through a gateway person, a terminal person, and then a lender,” says Tony Adams, who owns Big Wheel Provisions, a catering company with food truck services located throughout Orlando, Fla. “With Square, you go from signing up to having an account in about 15 minutes, and it’s all very secure.”
2. Flat fee option. Instead of paying an average of $6,876 in monthly fees, business owners can now opt for Square’s 2.75 per cent rate per swipe. Or merchants can choose the flat rate of $275 a month—with no additional fees—and they are able to charge up to $250,000 annually.
3. Provides analytics. Square has a feature where photos of items purchased are displayed on receipts. Eastland uses this to track sales, and Adams says it is handy in identifying trends and checking in when he’s away.
“I can easily view how busy we are and what’s selling without having to actually be there every minute,” he says.
4. Fast processing. With Square, you can often get paid the next day. And each transaction takes less time than waiting for approval and printing a receipt.
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