EMV adoption got a major shot in the arm. Because of liability shift by October 2015, merchants are going through EMV upgradation. The current chip card readers are not that ideal especially for small merchants. Such readers cost hundreds of dollars, are a bit clunky and definitely not of the size fit for simply carrying around. Now Square is backing up the merchants to deal with this with its latest offering.
Square has finally launched a new reader especially designed for chip based cards. Square is promoting it as the most affordable reader in the market and as an easy-to-set-up reader. The reader is first of its kind for the U.S. and is priced at $29. The reader is quite compact, something that could fit in your pocket, and is compatible with both iOS and Android. Along with chip cards, it would process magstripe cards as well. The reader is highly energy efficient and could last an entire day of sales.
Square had already made announcements about the EMV and chip-compatible dongle back in July. The new reader feels similar to the old reader models and should not affect the experience for those who already use it. With the chip card integration, Square is keeping up with the current regulations and the strategy to introduce the product way before October 2015 is an ideal step.
If the merchant is already using the product Square Stand, then Square is offering another option as well. Square is providing a Chip Card accessory for Square Stand in order to process chip cards. The accessory has been priced at just $39. The new chip card solutions will officially go on sale early next year.
Here is an illustration highlighting the new chip card solutions:
Square usually doesn’t charge for the reader dongles and simply takes a cut on each transaction for processing it. It seems interesting that square has suddenly started charging the new devices. The new charges can be justified with the cost of developing the new dongles. Moreover, Square already gets a small cut on each transaction plus it has to spend a lot on marketing its products and business development as well. A thing to be noted is that since the new dongle is first of its kind in U.S., Square might be taking advantage of USP (unique selling proposition) of its products as well.
With the new chip card based readers, Square can now look forward to targeting other regions as well especially Europe. In Europe, a mobile payments company is required to accept chip-based transactions in order to work with companies like Visa.
As the battle for mobile wallets is heating up, Square is trying its best through such initiatives to lock in more users and make sharing as fast as possible. We can expect the company to come up with even more features on the mobile platform and attract more users with its mobile payments capabilities. The company doesn’t show any signs of slowing down, either, though it operates in an incredibly competitive space.
Regarding Square's new launch, Brian Roemmele had this to say on Quora:
"Square built a very successful company on s free card reader and took the wrong advice moving forward forcing Square merchants to miss Apple Pay. The walls have been closing in on Square since they left the farm that made them so very strong and successful: the simple payment card reader. As began reaching for more and more abstractions and distractions that were obvious to anyone with empirical praxis, would fail: Square Taxi Payments, Square Gift Cards, Square Wallet, Square Market, Square Cash and Square Capital, they sealed their own fate."
"The absolutely astonishing thing is not that Square is building an EMV capable device, not that they need to charge money to every merchant that signs up, no the astonishing thing is they choose not to have NFC included in the device. This by far is the most critical error in judgment, error in planning and error in advice. Square is not only on the wrong side of the pricing war they just about invented, Square is on the wrong side of technology and history by not supporting NFC and Apple Pay. I love Square and feel they still have a great future ahead, however they can do far, far better then this."