Square has launched a new redesigned and slimmer magnetic stripe reader and would like us to believe that its a major update. This update was expected as competitors around the world have launched better hardware devices in the last 10 months such as AccuPOS, JUSP in Europe, Harbourtouch and POSguys. The new Square card reader has been apparently revamped by a designer who worked in Apple on small accessories, such as lightening connector. The reader can detect swipes more accurately than before without failures. The total mPOS penetration in U.S is around 1.7 million+ devices (card readers) of which Square has sold more than 70%
However if you look at the merchants landscape described in Knowledgefabers POS report you will see that square and all other players have barely touched the micro merchant's segment. And it's amazingly huge at 25 Mn merchants, while rest of merchants constitute only 5.85 Mn. Even square supports only 2% of those 25 Mn micro merchants. Mobile card reader business is facing challenge from various enabling technologies such as NFC systems, ibeacons and sound waves based payment systems. These 25 mn merchants is a must to have.
As most of you know, Square is a San Francisco based company in the area of merchant services aggregation and mobile payments. It is backed by investors such as Marissa Mayer, Kevin Rose, Biz Stone, Dennis Crowley, Shawn Fanning, Ed Cramer, MC Hammer, and Esther Dyson.
The company has also raised several additional rounds of funding:
Series A funding from Khosla Ventures.
Series B funding from Sequoia Capital.
Series C funding from Kleiner Perkins Caufield & Byers.
Total Funding till date: $341 Mn.
The company's valuation in September 2012 was $3.25 Bn. The investors and stakeholders would most probably be asking - what will drive the growth in the future? The large and mid-size customer segment is stagnating. Square’s pilot with Starbucks, where it experimented with an app based system for Starbucks stores, didn't go that well.
Nobody can take away the success that Square had so far. Square has been amazingly successful as compared to anybody else in the card reader space. Whether you compare with startups or large players like Intuit or PayPal. Square has processed over $100 Mn in credit card payments through its m-commerce platform.
The new Square reader is 45 percent thinner than the previous version of the reader and more accurate than similar credit card readers in the market. Some of the other credit card readers in the market are Intuits Go payment and Paypal’s credit card reader. Intuits Go payment comes with its own reader but is also compatible with other readers such as Mophie and Blue tooth credit card reader. Verifone- another competitor in the market has come up with the Payware mobile reader.
The new Square credit card reader is a Point of Sale accessory which works with the Square register application.
The main new features of the new Square reader are:
A custom magnetic readhead and spring which is thinner and more accurate than the alternatives.
Custom electronics in a single chip, the reader is powered by the phone to which it is plugged eliminating the need for a bulky battery.
Improved communications protocol and custom audio plug, which makes the Square reader compatible with other devices.
The reader is free to anyone who signs up to a Square account or can be purchased on the company website.
A video of the Square reader is embedded below: