Now Square brings its Pay by Email, after Paypal, Dwolla, Google, and Venmo

Sending money through email has been gaining popularity off late with innovations from Google, Dwolla, PayPal and Venmo. After several months of invite-only Beta testing, Square rolled out its new person to person payments service called Square Cash on 15th October 2013. Its worth revisiting the article we posted on 28th Aug 2013 about Could Money become the most popular attachment to Email?

Square Cash allows a user to send cash to anyone with a regular email address and debit card. No login or password is required to be remembered and no special software or hardware — only email. It claims to work on both ends using any email service on any email-capable device, whether a smartphone, computer or a tablet.

Square is not the first one to do this. Early players in the space include Venmo, Google, Dwolla and PayPal. Venmo was an attractive factor in the acquisition of Braintree for $800 Mn according to eBay and PayPal.

Apps for iOS and Android that incorporate email are also being released by the company. We want this to be an extension of your offline world, so that no matter where you are, you can send money to anyone, said Brian Grassadonia, Product Manager.The app, however, is really just a front end for sending an e-mail according to him.

What was the surprise? During Beta Testing, the initial version of Square Cash charged 50 cents per transaction for senders. However, it is now offered with no associated fees. Amazing!

In case you are wondering how did Square do it from a technical standpoint - read this. They basically got RFC 5321 compliant STMP mail servers to send and receive these emails, with money as attachment. A number of processes were built on top of the STMP mail servers that connect to internal systems. These systems run services from Ruby, PostgreSQL, WebSocket Protocol and Java etc. Prepackaged information from these systems is sent to the Visa Personal Payments API. Obviously a bank is needed to do all this, and we came to know from sources that private beta trials of transactions of Square cash were processed by Chase Bank. Square has a lot of history with the bank.

Square cash details:

- To send money, the user sends an email to the recipient with '' written in the CC space.

- The dollar amount is entered in the subject line.

- If the user and recipient are new to the service, both will get an email from Square with a link to a secure website.

- Here the user has to register his debit card with a number, expiration date and billing Zipcode. This is to link the e-mail address with the debit card.

- After that, one or two days are required for the funds to get transferred.

- Up to 14 days are given to the recipient to enter his debit card and receive money. Reminders are sent to him on alternate days through email.

- Once the user’s debit card account is set up, any cash transaction that follows automatically goes through. The service is free to send and receive, though the limit stands at sending only $2,500 per week.

LTP View:


- Square cash is convenient and easy to use with the advantage of no fees for sending cash. The funds are transferred quite fast -within 1 or 2 days.

- Square as an established payment brand could attract more users to trust and use the service.

- Works across devices and email systems


- Only debit cards being accepted would have definitely made the Germans (if it was launched) happy but the larger portion of American population uses Credit cards. The service is currently available only in U.S.

- Fraud detection and prevention poses a question with this service. Square may need to strengthen that to attract more users.

If I try to summarize all the research we have done on payment companies, its becoming evident that NOBODY has the magic wand. There are so many enabling technologies that the companies who were initially very focused on one, are slowly and gradually spreading their wings across the technologies. Google Wallet and now Square are classic examples of this. What started at Square was a mobile card reader revolution, it then added Square-built Starbucks mobile app and now the Square cash pay by email. The other way to look at it is unlimited entrepreneurial experimentation to find better solutions.