Photo: Owen Thomas, Business Insider
There’s a new competitor to Square that just rolled out its service nationwide.It’s called GoPago. It’s based in San Francisco, just like Square.
It lets you buy stuff at physical stores with a mobile app, just like Square.
It lets you find nearby stores that accept GoPago, too—just like Square.
And it’s bankrolled by JP Morgan Chase, just like Square.
But right now, it has two key features that give it an edge over its better-known rival.
Why GoPago might win retailers: GoPago doesn’t just give software and a card reader, like Square does. It actually will give merchants a free Android tablet and free Verizon 4G wireless data. (The tablet and data connection can’t be used for other purposes, just GoPago.)
It charges slightly more than Square—2.85 per cent of transactions versus 2.75 per cent.
At one point, according to a document Business Insider reviewed, GoPago was considering charging merchants a $29 monthly fee for the tablet and wireless service, but it scrapped that before it launched.
A tablet with 4G service costs hundreds of dollars upfront and somewhere between $30 and $60 a month, depending on the plan and carrier.
Even going by the price that GoPago was thinking about asking merchants to pay for something it’s now giving away for free, that’s a pretty good deal—for the merchants. Whether it’s a good deal for GoPago is up in the air.
Why GoPago might win over consumers: GoPago lets you place a takeout order in advance using its app. You go into the store and just pick up your order—it’s already paid for. Square doesn’t do that, but its Register app already tracks menu items, so it could add it to its Pay With Square app. For now, GoPago has the advantage.
So why is Chase backing two competing startups?
According to GoPago CEO Leo Rocco, a Chase executive told him, “We’ve looked at a thousand companies in this space. We’re investing in two.” That’s GoPago and Square.
“[Square CEO] Jack Dorsey inspires me,” Rocco said. “We love what we’re doing over there.”
Chase led GoPago’s first round of outside investment for an undisclosed amount earlier this year.
GoPago has 70 employees, but it’s leaning on Chase for its salesforce.
“20,000 Chase business bankers are looking to drive proliferation of GoPago Live,” Rocco said.
GoPago’s payments get processed by Chase. As do Square’s. Chase just won Starbucks’s U.S. card-processing business through its partnership with Square.
So by backing these two startups, Chase ends up winning either way—and beating its big-bank competitors to a wide swath of the retail payments business.