Square's problem is that their current crop of customers, individuals and very small businesses, are the only ones who would see their premium rate of 2.75% as a good deal, while at the same time that segment eats up a lot of that margin with increased marketing, support and fraud costs.

Upmarket where the real volume is, it is very hard to convince medium-sized businesses to pay a premium processing rate just to get a slightly enhanced POS, which itself has huge switching costs. For example we now know that the Starbucks deal turned out to be a loss for Square, a discounted fee probably justified as a marketing expense to get mindshare. Starbucks didn't value Square's product enough to actually pay a premium rate.

This is why I think the article is essentially spot-on in calling it a commodity product. Square is often compared to Apple, but Apple successfully decommodifies products through actual fundamental innovation (phones, MP3 players, PCs). They make stuff people actually want to pay premiums for. Square did innovate a cheap card reader, but beyond that it's mostly been beautiful design and attractive but unprofitable terms for the individual and micro business market.

Square Cash for example is pretty simple but it must be a money loser, since they charge no fee it costs at least 21 cents to do a debit transaction. Would it be as compelling if they charged 50 cents to send money? Beautiful design and all, probably not.

The moral to the story is that IPO-aspiring companies need to make products people actually want to pay premiums for, not just cool executions of commodity offerings that don't move the needle much in terms of actual utility.

> fraud costs

Are you making educated guesses or do you actually know that fraud costs Stripe money?

EDIT - Yep, sorry, Square. I'm just in the middle of integrating with Stripe, so it just slipped.

You mean Square. A little of both. The WSJ reported that their gross margin shrank from 27% to 21% in 2013 and specifically mentioned fraud as a component. (Interchange didn't change much.) [1]

With very easy signup with minimal due diligence, plus next day payout, it's an attractive target for fraudulent sellers. Even with relatively honest but low volume sellers, chargebacks may be hard to collect once the money's paid out, so Square is left holding the bag. With a gross margin of barely more than half a percent of the transaction amount, one bad merchant can erase the revenue from a great many good ones.

Stripe and PayPal face similar issues in the ecommerce world, and you can see how annoying PayPal has had to become to tighten up their fraud controls (lots of bad experiences with funds getting frozen).

[1] http://online.wsj.com/news/articles/SB1000142405270230382560...

Hmm, fraudulent sellers. So you are basically saying that if someone charges a bunch of customers and then disappears, the chargebacks fall on Square's lap? This doesn't sound right. I'd guess that this is acquiring bank's problem and they hedge against this through their fee structure.

Usually the payment processor (square in this case) is responsible for chargeback/fraud costs. The acquiring bank will only end up paying those costs if square goes under and is unable to.

Even if it's passed back to square via fees, square's still paying for it. The fact that their gross margin shrank indicates those costs increased. And we know interchange didn't account for it.

Square, not Stripe. And how could fraud not cost them money? That's a cost of doing business for every payment processor.

Fraud costs them money the same way support costs them money - it's an operational expense. What I don't know if they are also on a receiving end of any penalty fees, especially in cases of fraudulent merchants.

Dealing with fraud costs money (because it costs money to pay people to do it), even if they don't bear the costs of the actual fraud.

>Square is often compared to Apple, but Apple successfully decommodifies products through actual fundamental innovation (phones, MP3 players, PCs).

Disagree 100%. Apple's products are inherently commodities, and their innovations are decidedly only in the PR and marketing spheres. From a technical perspective nothing they do is particularly innovative.

Apple did not invent the mp3 player. Apple built their "seminal" GUI only after Xerox PARC showed them how. Thinkpads have had fingerprint scanners since 2004. Et cetera, et cetera, et cetera.

Apple doesn't innovate so much as take someone else's idea and give it a slick marketing campaign and some anodized aluminum casing.

>They make stuff people actually want to pay premiums for.

This part I agree with. But it's because of the slick marketing, not due to some kind of next-level technical wizardry.

It's a complete nonsequitur - are Luis Vuitton/Gucci/Prada/whatever accesories commodities because "from a technical perspective nothing they do is particularly innovative" ?

It doesn't really matter how you make your product not-a-commodity. The market repeatedly shows that it doesn't treat Apple product as commodities, therefore they are not commodities, and they can have very different business fundamentals than, say, Dell or HTC.

And it doesn't matter if the escape of commoditization was achieved by R&D, PR, divine intervention or whatever else; There are many possible ways of differentiating your products; and the market behavior for commodity and non-commodity goods/services is objectively different no matter why your product is/isn't a commodity.

Luis Vuitton/Gucci/Prada accessories are commodities by definition.

From wiki: >In economics, a commodity is a marketable item produced to satisfy wants or needs. Economic commodities comprise goods and services.

Are you suggesting that Apple products are not marketable items, thereby being goods? Or that their cloud products are not services?

Are you suggesting that a Luis Vuitton handbag is not a marketable item produced to satisfy consumer wants?

Luis Vuitton/Gucci/Prada accessories strictly are NOT commodities by definition.

"marketable item produced to satisfy wants or needs" is a neccessary but not sufficient condition for being called a commodity.

Commodities is a subset of all goods / marketable items - those that have high fungibility and low differentiation. It's not a binary classification, but on "commodity <> not-commodity" scale Luis Vuitton/Gucci/Prada stuff is near the extreme not-commodity end.

Actually, the same wikipedia explains it quite well in the sentences after that first line.

The next sentence is

"The exact definition of the term commodity is specifically used to describe a class of goods for which there is demand, but which is supplied without qualitative differentiation across a market."

You're using the wrong definition (and truncating it to boot) for "commodity" here. The key element is the "undifferentiated" element, and, while there's room to debate the true level of differentiation of mass-manufactured products to which a brand label is applied, the point is that what sets Luis Vuitton, Gucci, Prada, etc., apart in the marketplace is in fact a perceived differentiation in quality from products not- or differently-branded.

I thought you got unfairly slammed for your Apple comments, but you're really pursuing a barren ground here.

While "fundamental innovation" is a little strong, they are not merely better "decidedly only in the PR and marketing spheres". I'm guessing your experience has been different, but the fact of the matter is that a large segment of the market has such a better experience with Apple products that they're willing to pay a premium.

Not to deny that their cultural position as status symbols is also a big factor, but it is an objective fact that many people actually have better experiences, and not by accident or because it's easy to make that experience work, but due to deliberate hard work by Apple that many competitors have tried and failed to supplant.

> From a technical perspective nothing they do is particularly innovative.

Could not disagree more. While it might look like that on paper if you decompose an Apple product to its parts, there is clear value they are adding as the system integrator. There were very capable Windows Mobile PDAs before the iPhone, and the sensors used existed too, but the particular combination that provided the marvelous user experience never existed before. That is innovation.

What??

iPod was lightyears away of any other MP3 player in the market that time (in capacity, battery and UI)

iPhone pretty much invented the concept of smartphone and apps. The apps themselves were so breakthrough innovation that Microsoft changed "Windows" to acommodate it. Do you understand how big is Windows and how big of a change is to try to include apps on Windows 8?

iPad was such a new concept that almost no one understood it when they launched. People couldn't even imagine how to use it before it came to life and now tablets are everywhere.

C'mon, I ain't no apple fanboy, and I really do believe Steve Jobs is overrated individually, but Apple as company is innovative as one can be. Or are you going to use the same argument against Elon Musk because he didn't "invent" space flight or electric cars?

Lightning strikes Apple time and time again. People like you don't like this for some reason, so they try to rationalize it by blaming it on "marketing".

And why not? Diamonds are nothing but marketing. Red bull is nothing but marketing. Nike is nothing but marketing.

Apple is a huge darling of most journalists. They can do no wrong, and the first exposure most people had to the "innovations" were through Apple's consumer tech.

The McKinsey article linked to "Grow fast or die" in the Techcrunch article is well worth reading:

http://www.mckinsey.com/insights/high_tech_telecoms_internet...

> They can do no wrong

It's not true. Remember apple maps fiasco? Or antennagate?

> or processing fees dramatically change in the market (not likely at all)

Square started off tacking 1% on top of what most stores paid for most transactions. Then processing fees dramatically changed in the market, in 2010, when the "Dodd-Frank Wall Street Reform and Consumer Protection Act" and the "Durbin Amendment" to said act were passed. This capped interchange rates, and interchange on most debit cards when swiped as credit (the way Square works) dropped to 0.05% + $0.21 per transaction.

The free debit/check card you get from your bank is the daily spender card for millions, making Square's fee on a large portion of transactions almost 100% markup at this point. Even among the "dongles for phones with apps" offerings, they're the most expensive. Intuit's dongle is 1% cheaper -- 1.75% -- if you pay $12.95 a month. EMS, which doesn't have name recognition with hackers but has been around for decades, offers a dongle with 2.25% flat rate.

Is there reliable data on the dongle market share?

My anecdotal evidence speaks against Intuit's GoPayment. Every. Single. Transaction I tried with Intuit's dongle on day one was classified as fraud and required sending a fax to someone at Intuit with things such as "copy of invoice", "copy of business agreement between two parties", and "copy of physical credit card imprint" (mind you, for a digital dongle). I'm sure most of merchants who have a need for dongle are excited to maintain such extensive documentation per each transaction, but the Intuit dongle is collecting dust for now, even though I'm probably counted as an active user on their platform, as my account is not killed and is active.

Why the ""?

"Square is in a market where once you have a customer, you have the customer. "

Square has to compete on precisely three factors - First, and by far most importantly, cost. Next, ease of signing up, and third, Ease of use.

Any company that comes up with a cheaper system will almost instantly start winning away square consumers. That, to me, pretty much defines, "commodity"

Square competes on only one of those factors.

1) Cost. They entered the market at an extremely high price point. Actual interchange rates on swiped cards are 0.05% (for most debit/check cards used as credit, since 2010) to 2%. Square charges 2.75%. Any business that currently takes Square can add 1-2% to its margins by talking to the nearest bank about a merchant account, which they've likely offered since the 1970s.

Now, merchant accounts typically come with some other costs ($20/mo or so in fixed fees, different rates per type of card accepted, more expensive terminals/hardware, etc). But if you're not a food truck or flea market vendor, your processing volume will cover those cost in no time, which is why you don't see Square outside boutique stores.

2) Ease of use. Square's dongles and apps are much more difficult to use than a dedicated card terminal. The customer doesn't get to swipe their own card, the store doesn't get to accept debit at all (which would be MUCH cheaper for them), and they're really finicky to actually get a good swipe on. Their POS software is a toy version of real POS software; it's got maybe 10% of what you need to run a retail outlet, which is why its use is limited to vendors with a catalog that fits on one or two screens and who move little enough product to do their inventory and accounting with an Excel spreadsheet.

3) Ease of signing up. This is the only place Square actually competes (and wins with a certain audience). You pick up a free dongle, install a free app, and you're in business. If you'd like to add 1-2% to your store's margins, you take 3-5 business days to fill out an application and credit check for a merchant account, wait for approval from an underwriting department, then buy POS software and a card terminal. It costs a little more up front, it takes longer, and it's intimidating. That's where Square shines.

Many of the taxi drivers (Bay Area, California) that I worked with had to pay 8.5 - 10% for their credit card charges in the bay area, they absolutely despised taking credit cards - they all quickly switched to Square, and I've never had any issues providing them with cards anymore.

The food truck by our company does about $500/day, or about $10,000/month. There has to be reasons other than the $20/mo that has encouraged them to go with Square instead of a merchant terminal.

I'm wondering if the 2% you are quoting is available to all businesses - sounds like the merchant check might be a bit more challenging for taxis/food trucks.

Totally agree with you on the Ease of Use - Square is vulnerable there. I'm surprised nobody has licensed Apple's lightning connector to connect to a more robust card terminal yet.

> Square's dongles and apps are much more difficult to use than a dedicated card terminal

Just FYI: https://squareup.com/stand

I have a relative that opened a natural "bath & body" store on the main street in his town. He started out with the Square hardware kit (stand, cash drawer, receipt printer, and a barcode scanner from Amazon). It was gone and replaced with real hardware within a month; not only was the POS software entirely inadequate, but checking people out was terribly inefficient and off-putting, costing them business. People don't like to hand over their card, they want to swipe it themselves. They want to be able to pay by debit. They want to see on the screen what's being charged before swiping. They don't want to sign a tablet with their finger or a squishy stylus. Nobody ever bothered to continue reading the screen after signing, so the cashier always had to spin it around, accept the signature, and skip the e-mail receipt screen. It's all terribly slow and strange compared to paying at any other store. The only thing the stand solves compared to the dongle is ease of getting a good swipe.

I'm quite savvy with technology and it bothers me to check out at Square merchants for much of the same reasons. First and foremost, I want to see the price of the item as I am being rung up, doubly so if the price can vary based on my selections. (Why on a varied price? It serves as a check that the person taking my order has heard me correctly.) I strongly dislike signing with my finger, something that is very inconvenient during the time of year when the weather is cold outside since I'm usually wearing gloves.

Since a lot of my small-purchase/walk-in shopping is done when I'm walking around a densely-populated area, I've found myself shying away from places that advertise "Pay with Square" or that have an iPad for a terminal. If there's something equivalent nearby, I'll just go there, especially if that store has a PIN pad.

My parents is still running a small business. None of my customers cared about handing over their cards for the 8 years I worked there.

I much prefer LevelUp's system with QR codes than Square's. Everytime I'm at a food truck my card would be swiped about 10+ times before it would go through. Totally agree about the stylus signing, no one reads the signiture anyways unless it's a fraud claim, nevermind that stylus signitures barely resembles an actual signiture (look at driver's license sig).

Transaction fees: These rates are getting pretty bad for credit cards. My parents still uses BoA terminals as a POS/processing and CC rates for AMEX was at 4%+ and about 3.5% for VISA about a year ago.

Edit: Like to point out that I actually checked signitures on back of cards and id'd people. Most people were surprised, but actually extremely happy that I did.

Every place I've gone to with Square has let me use my debit card and given me the ipad/ipod/iphone to swipe myself.

I don't believe that. Can you list 3 or 4 Square merchants that let you swipe yourself?

I own a jewelry store and we let customers self checkout. The Square Register swivels around for the customer to review, sign and print. We've had zero pushback across the board.

The Lab cafe in Ann Arbor is the only one I can remember by name but I've never had to hand my card over.

What in the world is the big deal with handing cards over anyways?

This isn't in Georgia by any chance is it? I was at a bath and body store that used the Square setup. First time I saw and as a techy person I thought it was neat but maybe just because it was different but not because it was simpler to checkout or anything.

Nope, not Georgia. You weren't at "Nourish" by chance? They're somewhere in Savannah, and helped inspire this other store, which carries their product line among others.

Yep it was Nourish right in downtown Savannah.

Dan's usually correct on payments stuff but I think he's confused on the costs here, possibly because Square's average ticket sizes are extremely low making the absence of a flat charge very cost-effective for Square merchants.

You're right, with a traditional merchant account there's a flat portion of the transaction fee. I'm paying (interchange + 0.04% + $0.10) to my current processor, which means the flat fee portion of each transaction is $0.15-$0.31. If you're selling single coffees and tacos, that's a significant percentage of the sale and makes Square's rates a very good deal. Square can also be cheaper for American Express for certain size businesses as well (if you're /very small/ AmEx has a flat rate program that's cheaper than Square, if you're too big for that but too small to negotiate better than the 2.89% rate they'll offer most small businesses, then Square is cheaper).

If you're ringing up $20+ sales most of the day, Square is much more expensive, especially for debit cards (whether swiped or PIN-authed, which Square doesn't do). Debit is by far the most popular form of in-store payment in the US, used more than twice as often as either credit or cash [1].

A few example fees using my quoted rate above --

For a swiped Visa debit card (interchange is 0.05% + $0.21):

    $5: $0.32 (traditional) vs $0.14 (Square)
    $20: $0.33 (traditional) vs $0.55 (Square)
    $50: $0.36 (traditional) vs $1.38 (Square)
    $100: $0.40 (traditional) vs $2.75 (Square)

For a basic swiped Visa credit card at a supermarket (interchange is 1.22% + $0.05):

    $5: $0.21 (traditional) vs $0.14 (Square)
    $20: $0.40 (traditional) vs $0.55 (Square)
    $50: $0.78 (traditional) vs $1.38 (Square)
    $100: $1.41 (traditional) vs $2.75 (Square)

MasterCard fees are nearly identical. Giving away $1 here and $2 there on every single sale all day adds up quickly, which is why Square can't move up to more lucrative clients while maintaining that fixed rate.

1: https://www.firstdata.com/en_us/insights/payments-101-white-...

My experience as a retail store owner was quite a bit different with only about a third of volume on debit cards. And I suspect the debit card stats are skewed by things like groceries and gas which aren't good proxies for independent retail, square's sweet spot. And I'm not sure who's offering interchange rates without any markup.

> And I'm not sure who's offering interchange rates without any markup

I'm not a payment industry insider, but I made my best effort to be accurate based on my own experience with several merchant account providers and with Square.

Those were per-transaction cost comparisons using the actual rate my CC processor charges (as I said). That's interchange plus 0.04% plus $0.10, not interchange rates without markup. "Interchange plus" pricing has seemingly become pretty common the past few years, at least in what's advertised to new businesses, and now there's a couple of ISO/MSPs offering interchange plus $0.10 flat to small businesses out there, which would be even less than those costs I quoted.

That "boutique retail" store a relative of mine opened that I mentioned in another comment -- the first MSP to walk through the door to try to sell him credit card processing offered interchange-plus pricing. None of the constantly-shifting "downgrade tiers" stuff anymore. It makes cost comparisons like this possible for once.

There's still some BS costs like "statement fees" and "daily batch fees" with some companies, but that kind of thing gets overshadowed by the per-transaction savings pretty fast. If I'm overlooking something else, I'd love to know, I don't want to be giving bad advice.

> And I suspect the debit card stats are skewed by things like groceries and gas which aren't good proxies for independent retail

The study those stats came from breaks it out by merchant category. Cards were the preferred payment method at all types of retail stores they listed (grocery, department store, drug store, discount/warehouse, etc). Cash was preferred only at fast food restaurants, coffee shops and theaters. Debit was the preference over credit at all but department stores.

Can't argue with that. The one question I would ask is if the stats were # of tons or $ volume? That's also another way that debit usage can be skewed.

This is a spot where the market Square is in contrasts with the market Box is in. Online storage has had big price drops recently. Payment processing is much more stable, and I don't think it's even possible for another company to price gouge. They'd have to cut an amazing deal with the banks, which sounds unlikely seeing as the incumbent behemoths haven't been able to negotiate better deals either.

The price is pretty efficient in this industry, what's really inefficient is the experience for both the businesses and consumers.

"Payment processing is much more stable, and I don't think it's even possible for another company to price gouge."

Another thing that makes me think "Commodity."

And the square "dongle" is anything but a good experience. I travel a lot, and I dread every time I return to the Bay Area and have to deal with Taxi Drivers and their attempts at getting credit cards to swipe on the dongle - about 5-10% of the time we just have to enter the numbers in, paying usually takes 30-40 seconds all in, and I don't get a paper receipt which adds another hassle when doing expense reports.

Compare to Singapore where my transaction time with comfort cabs is <5 seconds and I get a decent receipt. (Of course, I also end up paying 10% admin fee for using a credit card, so I pay for that convenience)

Part of this is skill - swiping the card through the square dongle takes a lot of skill - I note when I pay at a food truck (100% square in Redwood City) - they seem to be able to do the transaction in about 10 seconds.

On the other hand, the profit margins for Square's customers are generally razor-thin, so it seems like you wouldn't have to undercut them by all that much to steal a lot of their customers.

I think you mean undercutting, or predatory pricing.

Price gouging is when you use a monopolisitic position to charge an unreasonably high amount.

It may compete on those three things, but that doesn't mean a competitor that is cheaper and easier (in sign up & use) will win. Brand recognition, reputation, quality of support, switching costs, customer intertia, and probably other factors all matter. I'd rather try to create a new market than displace Square's customers, let alone compete w/ other "cheaper, easier" Square competitors.

Relevant:

http://en.m.wikipedia.org/wiki/Blue_Ocean_Strategy

If you want to see the success of Square, go look at any new food truck or coffee shop or streetside vendor. It seems to be the new solution for that sort of thing.

Why wouldn't they just use a portable reader like food delivery guys have been for over a decade? I mean, in Canada if you order food the driver shows up with a machine you insert your card and enter your pin. These machines do all communication by 3G. You see food trucks and coffee shops with these too. Isn't that the norm in the US?

Portable chip based card readers have been around longer than Square. Hell, I remember using them (pre-chip of course) since around 2000ish. And today they are just ubiquitous. They are straightforward and user-friendly for the user and today the Banks almost give them aways with your merchant account. I'm still trying to understand what problem Square is trying to solve -- other than wanting to use your iPhone for everything. I just don't see a viable business with them.

That's not the norm, as of this year the chips are not commonplace in US-issued cards.

What you have is an imprint machine, where the merchant sticks your card over a paper with a carbon copy, slides over the top to make an imprint, then hands the piece of paper back to you for signature, then rips out the top page for himself while handing you the carbon copy one.

As you can imagine, this does not go well in food truck environment, where the mode of operation at crunch time might be "process as many customers per minute as you can".

Wow. That's just crazy! I haven't seen one of those imprint machines in 15 years. I thought they were completely dead. Even before the Chip cards, it was normal to have portable terminals that you would just swipe, enter your tip, and it prints the receipt that you signed.

You can't go on adoption alone. You have to look at their balance sheet, and the whole point of the article is that their balance sheet and future sustainability is reportedly not so hot.

Although to be fair it does end on a non-fatalist note that leadership may be able to tweak the business into something less grandiose and more oriented towards grinding out a profit on a better-than-average commodity product.

Unfortunately, in the market of transaction processing, that's not an indicator of success. Transaction volume is. It is the only metric of success.

Not all of them are using Square. There a lots of merchant companies that offer card swipe phone adapters, including PayPal and Quicken.

I wonder how much would cost to have the actual card reader that's seen in shops around

Oh by the way, Square's market is limited. The USA still uses primarily the unsafe magnetic stripe for payments, and even Canada is phasing out its use (in Interac at least)

This is a good point. Surely Square have a plan for when America finally joins the present decade and adopts EMV/Chip and PIN? Or are they hoping to bootstrap pure mobile payments as an alternative? I don't see a competitive advantage in the latter scenario when PayPal already have a system with photo verification rolling out here in the UK.

Square's expansion in Canada last year doesn't appear to have gone anywhere meaningful. It's not just Interac; all cards are now Chip based. Credit Cards still also have the swipe but it's mainly used for cross-boarder shopping. It's been years since I've seen a card swiped in Canada that wasn't from an American tourist. Finally, Interac debit cards dominate the Canadian POS scene and the are Chip only and so won't work with Square any time soon.

If Square can't even meaningfully make inroads into Canada, I highly doubt they will be able to make inroads into anywhere else. But, we'll see...

chip is becoming more popular in the us now too

Mandatory as of October 2015 next year actually.

http://www.forbes.com/sites/tomgroenfeldt/2014/01/28/america...

Not mandatory, just (barely) incentivized starting in 2015. You'll see non-EMV cards and terminals around for probably another decade.

This is highly doubtful. The fact that merchants take on all fraud risk from a fake card present transaction is very high incentive. I have friends in Canada that own retail stores and they said that fraud has dropped to almost zero because of EMV. There are ways to scam it, by pretending that the chip doesn't work and have the cashier swipe it, but if the cashier swipes it instead of using the pin, they get in trouble because the merchant loses money.

So I bet you'll see very quick adoption, within a couple of years max.

Big box stores are already moving towards it, with Target (surprise! surprise!) leading the way. Mom-and-Pop shops will probably not be happy about replacement costs, but they're apparently a diminishing market force anyways.

Experience from other places that switched to EMV shows that this incentive is large enough to have a rather quick adoption. Yes, there are some niches where non-EMV terminals stick around - those that are low-volume and feel immune to fraud; but all common stores seem to switch quickly as otherwise all fraudsters focus on those who haven't switched yet, and low-margin business can't afford losing that money.

On the contrary, POS and payments services have never been less "sticky". There are plenty of iPad POS apps and swipe dongle thingy's to choose from, and the cost of switching is negligible, especially for the (Square's) low end of the market, who don't require much functionality.

My biggest problem with Square is that they have tied payments to point-of-sale. You can't use Square, the payments product, with another POS system, and you can't use Square Register with another payments product. This kind of closed ecosystem neither serves the customer nor moves the industry forward.

You don't have to use Square's POS features to use Square as a payment method. Their apps let you just type in a dollar amount to charge. I know one store that uses Vend [1] for their POS and Square for their CC payments. The Vend app launches the Square app when the cashier presses the button to pay by CC, then you switch back to finish the sale.

1: http://www.vendhq.com/

That's not an integration. That's no different than having a standalone CC terminal.

Who said it was? And what's wrong with having a standalone CC terminal? That's how most very small businesses (food delivery, auto service, tables at shows/markets) still take credit cards. Their wireless terminals aren't "integrated" into anything else, it's just a swiper/PIN pad with a 3G modem, and Square is the modern version of that.

It's certainly prefereble to have your POS integrated with your payments system. Otherwise, there's no guarantee, for example, that the amount charged matches the POS total. In addition, it's much easier for employees to steal, and it simply takes longer.

When NCR launched the first cash register over 100 years ago, the primary value proposition was to reduce employee theft.

A major reason we are prominently shown the amount of the purchase, or handed a ticket to sign is so that we can verify we are being charged the right amount and not being ripped off by a minimum wage (or less) employee. It seems using Square gets away from this.

I think once you're on Box you're not likely to go anywhere. And Square is burning almost as much cash, just not on salespeople.