Square has long generated the vast majority of its payments processing revenue from merchants that use free Square software to manage and track their sales. Now, Square is trying to make it easier to convert businesses that use non-Square software into Square payments customers, too.
Square Has a New Growth Hack to Increase Its Payment Processing Volume
Square wants new payments customers, even if it means they don’t use Square’s software to run their business.
Square
Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.
The company is launching a set of software programming tools — APIs, in tech speak — that allow stores to process payments through Square, and use Square hardware such as its tap-and-pay device, even if they don’t use Square Register, the company’s point-of-sale software. Alyssa Henry, the head of Square’s seller business, said the move should appeal to businesses that need custom point-of-sale software but still like the idea of using Square payments hardware or features like instant deposits, which are part of Square’s payments processing offering.
“Generally, there isn’t a one-size-fits-all solution,” she said.
The move underscores Square’s intention to find new ways to continue growing its payment processing volume at a fast clip, even if it means not controlling the whole experience. Payment processing businesses typically boast mediocre profit margins, but those margins can grow as a company processes more transactions. The launch is also another sign that Square is increasingly comfortable focusing on less sexy, revenue-generating back-end businesses, rather than looking for the next consumer payments hit.
Square will also announce an API to allow businesses with custom online shops to process online payments through Square. Up till now, online stores that wanted to process digital payments with Square needed to use Square’s own basic online store product, or work with third-party companies such as Bigcommerce.
There is no shortage of online payments processors today, though, so this offering would seem to make the most sense for companies that use Square in a physical store, too, and want to view sales metrics from both their store and their website in the same spot.
This article originally appeared on Recode.net.
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