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Square, Inc.

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Square, Inc. is a financial services, merchant services aggregator, and mobile payment company based in San Francisco, California. The company markets several software and hardware payments products, including Square Contactless and Chip Reader, Square Stand, Square Register and Square Magstripe Reader, and has expanded into small business services such as Square Capital, a financing program, Cash App, a person-to-person payments service, Appointments, Gift Cards/eGift Cards, Invoices, Virtual Terminal, Marketing, Loyalty, Employee Management, and Square Payroll. The company was founded in 2009 by Jack Dorsey and Jim McKelvey and launched its first app and service in 2010. It has been traded as a public company on the New York Stock Exchange since November 2015 with the ticker symbol SQ.

Square, Inc.
Square, Inc. logo.svg
Type of business Public
Traded as NYSESQ[1] (Class A)
Russell 1000 Component
Founded February 2009; 9 years ago (2009-02)
Headquarters San Francisco, California, U.S.[2]
Area served United States, Canada, Australia, Japan, United Kingdom
Founder(s) Jack Dorsey
Jim McKelvey
Key people Jack Dorsey (Chairman and CEO)
Jim McKelvey (Co-Founder and Director)
Sarah Friar (Chief Financial Officer)
Industry Mobile Payment, Point of sale, Financial services
Products Point of Sale, Market, Cash, Capital, Feedback, Reader, Stand, Register
Revenue Increase $2.2 billion(2017)
Alexa rank Positive decrease 2,155 (February 2016)[3]
Launched May 11, 2010; 8 years ago (2010-05-11)
Native client(s) on iPad, iPhone, Android

Square Register allows individuals and merchants in the United States, Canada, Japan, Australia, and the United Kingdom, to accept offline debit[4] and credit cards on their iOS or Android smartphone or tablet computer. The application software ("app") supports manually entering the card details, swiping the card through the audio jack-connected Square Reader, or inserting or tapping the card using the Bluetooth LE-connected Square Chip and Contactless Reader. On the iPad version of the Square Register app, the interface resembles a traditional cash register.



The original inspiration for Square occurred to Jack Dorsey in 2009 when Jim McKelvey (a St. Louis friend of Dorsey at the time) was unable to complete a $2,000 sale of his glass faucets and fittings because he could not accept credit cards.[5]

The name "Square" derives from the company's square-shaped card readers. .[6][7]



Square ReaderEdit

In 2010, the Square device communicated with the Square app through a phone's audio jack.

The Square Reader was the firm's first product. It is used to accept credit card payments by connecting to a mobile device's audio jack. The original version consisted of a simple read head directly wired to a 3.5 mm audio jack, through which unencrypted, analog card information was fed to smartphones for amplification and digitization.[8]

In April 2011, rival payment company Verifone claimed that the Square system at the time was insecure, and that a reasonably skilled programmer could write a replacement app which could conceivably use the Square device to skim a credit card and return its details, because the first-generation Square Reader did not encrypt track data in hardware. VeriFone posted a demonstration video and sample skimming app to its web site.[9] Dorsey called VeriFone's claims "neither fair nor accurate", noted that the card data could be gathered visually from the card, and said that the claims ignored the fraud protection provided by card issuers.[10]

Square now uses strong encryption on its devices, including SSL and PGP.[11] Its cryptographic keys are at least 2,048 bits in length.[11] Neither card numbers, nor magnetic stripe data, nor security codes are stored on Square client devices.[11] Square follows the guidelines issued by OWASP.[11] The current technology is Payment Card Industry Data Security Standard (PCI) compliant and Verisign certified.[11]

In July 2014, ahead of the October 2015 EMV liability shift, the firm announced a card reader that would accept chip cards and contactless cards. It supports chip-and-signature and contactless transactions; the standard Reader is also provided in order to support traditional magnetic stripe card transactions.[12]

In June 2015, Apple announced Square would release a new Reader adding the capability capable of accepting Apple Pay and other contactless payments, .[13]

In August 2018, Square released a version of its magstripe reader with a Lightning connector, allowing it to be used on iPhones without a headphone jack.[14]

Square StandEdit

Square Stand at a coffee shop turned around for the customer to choose a tipping option

In June 2013, the firm unveiled Square Stand, which turns the Apple iPad into a more complete point of sale system. It uses a larger reader and a rotatable base.[15] The product works with iPad 2, iPad 3rd generation (30-pin connector), and iPad Air (Lightning).

Square Contactless and Chip readerEdit

In 2015, Square launched a bluetooth-connected reader that works for Android and iOS devices to accept chip and contactless payments through their platform.[16]

Square RegisterEdit

In October 2017, a standalone point-of-sale system, Square Register, was announced for small to medium-sized businesses.[17] It consists of a merchant tablet and a customer tablet, with a built-in swipe, chip, and tap reader.[18]

Square TerminalEdit

In October 2018, the company introduced a self-contained Terminal product that features a display, prints receipts, and accepts chip, swipe, and contactless payments.[19]


Square Point of SaleEdit

Square Point of Sale (formerly Square Register) is point of sale software aimed at replacing traditional credit card terminals and cash registers. It combines payment processing with point-of-sale functionality like itemization and inventory management, and integrates with third-party platforms such as Shopventory, Weebly, and Bigcommerce via an App Marketplace.[20]

In August 2018, Square began allowing merchants to develop custom interfaces for the platform, via an application programming interface.[21] This can also allow the system to function as an ordering kiosk, allowing customers to input their own orders.

Cash AppEdit

Cash App (formerly Square Cash) allows person-to-person money transfer via the app or website. In March 2015, the firm introduced Square Cash for businesses, which includes the ability for individuals, organizations, and business owners to use a unique username, known as a $cashtag, to send and receive money.[22] In January 2018, the app expanded to support bitcoin trading.[23]

Gift cardsEdit

In December 2012, Square began allowing merchants to issue virtual gift cards; a QR code is scanned from the customer's smartphone to use the funds.[24] Physical gift cards were added in the service in 2014.[25]

Square CapitalEdit

In May 2014, Square launched Square Capital, which offers business financing to merchants using Square.[26] In contrast with a traditional loan, there is no time limit for a merchant to pay off a Square Capital cash advance. The merchant returns the advance to Square by paying back a percentage of their credit card sales over time.


On August 4, 2014, Square announced the acquisition of Caviar, a startup that delivers meals from high-end restaurants.[27] Caviar uses a fleet of couriers to provide delivery for popular restaurants who do not otherwise deliver.[28] Caviar is currently available in 18 markets in the U.S.[29] Users can order via the company's iOS or Android app,[30] or on Caviar's website.[31] In 2016, a class action lawsuit was filed against Square, claiming that the company falsely represented that 18% of the gratuity charge from each Caviar order will be given to the drivers while the drivers did not receive any part of it. In 2018, Square agreed on giving $2.2 million to settle the lawsuit while denying the claims against them.[32]

Caviar eventually replaced Square Order, an app which allowed users to make purchases in advance and pick them up at a predetermined time. In March 2015, Square announced that it was shutting down Square Order .[33] In 2018, Caviar took a step into corporate catering by acquiring Zesty, a San Francisco-based catering platform.[34]

Customer EngagementEdit

In April 2015, the firm launched Customer Engagement, a suite of CRM tools which includes email marketing services. These tools allow businesses to target customer audiences with customized or different messages and promotions based on actual (offline) purchase behavior.[35]

Square PayrollEdit

In June 2015, the firm launched Square Payroll, a tool for small business owners to process payroll for their employees. The product, currently available in Alaska, California, Nevada, South Dakota, Tennessee, Texas, Florida, and New Hampshire, automatically handles a business's withholdings, payroll payments, and tax filings.[36]

Square AppointmentsEdit

In August 2014, an online booking tool was added to the firm's offerings, allowing small businesses to accept appointments on their website.[37] The service only accepts scheduled appointments based on a service provider's availability, and does not accept restaurant reservations.[38]

Square for RetailEdit

In February 2017, the firm launched Square for Retail, a set of tools optimized for retailers, including a new point-of-sale iPad app. Key features include employee management, advanced inventory management and reporting, barcode label printing and more.[39]

Square for RestaurantsEdit

In May 2018, the firm launched a subscription service for restaurants. In addition to processing payments, the system can track table locations, tip splitting, and menus.[40] The system directly integrates with the Square-owned online food-ordering service Caviar, with plans to include other similar services in the future.[41]


The firm has an application programming interface to process credit card payments online.[42] The API, launched in 2016, is expected to be the first step in Square's online expansion, with its acquisition of Weebly.[43]


Square received angel investments from Marissa Mayer, Kevin Rose, Biz Stone, Dennis Crowley, Shawn Fanning, MC Hammer, and Esther Dyson.[44] Since then, it has raised several additional rounds of funding:

The company's valuation in October 2014 was $6 billion.[47]

On November 19, 2015, Square had its IPO on the New York Stock Exchange with an initial valuation of $2.9 billion, down by more than half from its last valuation in October 2014 at $6 billion. Although the firm has yet to make a profit and has lost $420 million since 2012, it has decreased its losses from 44% of revenues to 16% in the six months leading up to its IPO.[48]



Square was co-founded by Twitter creator Jack Dorsey.[49] Dorsey also serves as chief executive officer and Sarah Friar serves as chief financial officer.[49]

Square's office is in San Francisco.[50] The firm has more than 2,000 employees.[51]

Square has been available in the United States since 2010 and the company launched in Canada at the end of 2012.[52] In May 2013, the firm announced that its mobile payments service was available in Japan after agreeing to a partnership with Sumitomo Mitsui Card Corporation. The fee for transactions would be 3.25% in Japan.[53] It launched in the UK in 2017.[54]

Business modelEdit

As of March 2013, Square provides its magnetic stripe card readers to users for free.[55] Square charges $99 for Square Stand and $29 for its chip-based Square Reader.[56] The Square app is also freely downloadable from the App Store and the Google Play Store.

Square charges a fee of 2.75% on every credit card transaction.[57] Square does not have any additional fees beyond the 2.75% per swipe (or the 3.50% plus $0.15 cost per manually-entered transaction) and there are no monthly fees or set-up costs. The firm claims that its costs are, on average, lower than the costs charged by the conventional credit card processors.[58] Square is regarded as a useful app for entrepreneurs, including, for example, consultants, food truck operators, and traditional retailers.[59] Swiped payments are deposited directly into a user's bank account within 1 or 2 business days. In some instances, Square may withhold payments to its users pending issues related to chargebacks.[60]the fSquare also generates revenue from selling other services to businesses, including subscription-based products such as Customer Engagement, Square Payroll, and Square Register. For example, with Square Payroll, Square charges sellers a monthly fee of $20 plus $5 for each employee paid.[61]


At the TechCrunch Disrupt conference in May 2011, Square announced the release of two new apps, Square Card Case (later rebranded as Square Wallet)[62] and Square Register. Square Wallet, before it was removed from the Apple App Store and Google Play Store in 2014, allowed customers to set up a tab and pay for their order by providing their name (or a barcode) using a stored credit, debit, or gift card.

In August 2012, Starbucks announced it would use Square to process transactions with customers who pay via debit or credit card. In February 2014, Whole Foods Market announced it would use Square Register in select stores' sandwich counters, pizzerias and coffee, juice, wine and beer bars.[63]

In July 2013, thefirm launched Square Market, which allows sellers to create a free online storefront with online payment processing functionality.[64] In March 2014, the firm announced it will start allowing sellers to accept bitcoin on their own storefronts through Square Market. The seller will take no risk on bitcoin value fluctuations.[65]

In August 2014, Square secured an investment from Victory Park Capital, an asset management firm, to extend "hundreds of millions of dollars" to small businesses via Square Capital.[66] In May 2015, Square secured additional outside investments for Square Capital, with Victory Park Capital tripling its initial investment.[67] In its 2016 third-quarter earnings report, Square reported that it had loaned $1 billion to companies through Square Capital since the program's inception.[68] In October 2015, Square Inc. filed an IPO to be listed on the New York Stock Exchange.[69] Shares were priced at $9 on November 18, 2015, and on November 19, 2015, Square officially began trading.[70]

On April 19, 2018,[71] Square announced that it had acquired Zesty, a food delivery service that caters to corporate offices.[72]

On April 26, 2018, Square announced that it would acquire Weebly, a website-building service, for $365 million.[73]


In the mediaEdit

Business Insider praised the product for its "ease of use, simplicity and elegance". Business Insider favorably compared Jack Dorsey with Steve Jobs for what they called his "entrepreneurial vision and charisma".[74][75] The Next Web praised Square's website,, for its design and aesthetic appeal.[76] The product was also showcased at Apple's iPad 2 event.[77] GigaOM called the product a disruptive innovation.[78]

Customer feedbackEdit

Most complaints emerge from unsatisfying customer support.[79][80] The main reason for inquiries originate from suspended accounts with money on the hold due to alleged illegal business which infringes against Square's terms. The website states that "[t]he majority of the complaints fall into three areas: virtually nonexistent phone support, misunderstanding and nondisclosure of its former $2,002 card-not-present deposit hold policy, and reports of random fund holding or account deactivation exceeding 30 days with no explanation or communication from Square."[81]

Banned transactionsEdit

In May 2013, Square announced it would no longer allow firearms-related transactions to be performed using its devices or software. The company amended its terms of service for retailers to ban sales of "firearms, firearm parts or hardware, and ammunition; or ... weapons and other devices designed to cause physical injury". The company denied that this move was related to the increased debate over gun control.[82]


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External linksEdit