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Monitoring Square Card Payment Systems (Part 1)

 

I am following Square mobile payment system. With the app and mini-reader on your smart phone, you can accept credit card payments without a merchant account. While Square has other uses as well, there are some segments that are prime targets for the card swiping capability. These include artisans and retailers of merchandise at non-fixed locations such as craft and art fairs, farmer's markets, antique shows. In the past, obtaining a merchant account without a fixed retail location was difficult, the paperwork too cumbersome for sporadic usage, and for small volume sellers, the swipe fees too high. Square provides a swipe pad that attaches to a smart phone or tablet, and the transaction is completed by the customer and a receipt emailed to them. This would seem to be a neat and elegant solution, but in my experience, I am not seeing a lot of implementation.

 

There seem to be so many ways to take money from our bank accounts and wallets that we may not have noticed much about Square so far.

 

My analysis will look at the penetration of this company on social media, and to see if they are missing opportunities to engage the groundswell and make this card swiping service more well known and used.

 

Jack Dorsey, the founder of Square, is already well known in the tech world. Jack Dorsey has developed other applications that use data to manage transactions efficiently, beginning with a program for dispatching taxis. His is probably most famous for his role as a founder of twitter.

"His three guiding principles, which are shared by the whole company and through its culture, are simplicity, constraint and craftsmanship" - wikipedia

 

From a Slate.com article by Farhad Manjoo posted Wednesday, Sept. 26, 2012: Silicon Valley’s Next Great Company:

 

"I believe the tech industry’s next great company is Square..... But calling Square a mere payments company minimizes its potential, and it misses Dorsey’s world-changing mission. Dorsey is bent on creating frictionless commerce. His long-term goal is to make accepting payments a breeze for businesses, and he wants to make paying for stuff invisible—for everyone, across the entire economy, for all types of goods and services"

Square in the mainstream news:

Recently Square began a new payment system with Starbucks, allowing customers to make purchases with minimal interaction, and this announcement has created a great deal of buzz for the company:

Though smartphone payments have a long way to go before they replace wallets altogether, Starbucks’s adoption of Square will catapult the start-up’s technology onto street corners nationwide, and is the clearest sign yet that mobile payments could become mainstream. - New York Times, August 8, 2012.

And in a New York Post article by Sara Ashley O'Brien Oct. 14, 2012: Square deals have Dorsey all aTwitter

"(Square)...will now have access to the masses at more than 7,000 participating company-owned Starbucks locations.

The stores will utilize Square for its credit- and debit-card transactions, as well as make themselves available on Square’s Pay With Square app. And last week an analyst reported that the company was expanding its deal with New York City’s Taxi and Limousine Commission to outfit 1,200 additional cabs with its mobile-payment system. "

 

 

The questions:  

• How is Square currently engaged in social media, both proactively from the company, and from the groundswell? 
• Are the target group merchants and customers a demographic likely to follow social media? 
• How does the prime competitor, PayPal, look on social media? 
• Will the Starbucks alliance buzz for Square cross over to the card-swipe division?

First Steps:
 Getting started seemed straightforward enough, but I encountered one difficulty: the ubiquity of the word "square" on the internet can make it hard to gather concise data, and while using the term "square payment system" improved things, it means I will need to be consistent when making comparisons.




Data from socialmention.com, October 14, 2012

My first step was to see if anyone was actually talking about Square on social media. A quick look at socialmention.com did not seem that promising, when I saw "strength" at 1%, however, the "sentiment" is a ratio of positive to negative mentions is good, as are the passion and reach numbers.

You can find a desciption of these caluculations on the socialmention FAQ.

I then took a look at PayPal. I expected the strength to be higher, as PayPal seems to have far more market penetration than Square. But I was still not sure what this was telling me, if anything.



PayPal data from socialmention.com, October 24, 2012

So, my next step was to try searching for both Square and PayPal complaints.

Comparison of "complaint" between Square (left) and Paypal (right)
 

 

 Again, puzzling, when you consider the results given when performing a google search for "paypal complaints". Looking at the excerpts from the posts referenced through the tool, it became apparent that many of them were not specific to the product, but were about something else, which used one of these products as the payment mechanism.

So, on to another source, Addictomatic. A search there found a lot of mention of Square, however, most, if not all of these were mentions on tech blogs. Fine for the company and analysts, but not likely sources of information for potential merchant customers.

One obvious next step: A google search for "how to accept credit card payments at craft shows" seemed like a gold mine of opportunity for one specific market:

 

I went to alexa.com to get another overall picture of Square; this gives us some more clues about users, but only in terms of website query and acess.

Alexa Statistics Summary for squareup.com

Squareup.com is ranked #8,704 in the world according to the three-month Alexa traffic rankings, and the time spent in a typical visit to it is roughly five minutes, with 54 seconds spent on each pageview. Compared with internet averages, the site's users are disproportionately Caucasian, and they tend to be moderately educated, childless users earning over $30,000 who browse from work. It has a bounce rate of roughly 30% (i.e., 30% of visits consist of only one pageview). Squareup.com is particularly popular among users in the cities of Miami (where it is ranked #1,512), San Francisco (#1,538), and Los Angeles (#2,052).Squareup.com is ranked #8,704 in the world according to the three-month Alexa traffic rankings, and the time spent in a typical visit to it is roughly five minutes, with 54 seconds spent on each...

 

Note that users spend almost 5 minutes on site (although hard to quantify whether visiting for info or managing account).

Next steps:
For the purposes of marketing the swipe application to small/itinerant businesses, participants in forums may be a place to start. As this project continues, I will investigate more of these in detail, and attempt to devise more complex searches to measure what may be happening in this area.

An addictomatic search on "accepting credit cards at craft shows" still showed results that were from news/tech sources, rather than "groundswell" results.

The next step is to get more detailed analysis of any mentions of the Square system on social media.

 More to follow...