Square

SQUARE is a mobile payment company in the United States. Its founder is Jack Dorsey. Square users (consumers or merchants) use the mobile card reader provided by Square with smartphones to match card consumption through applications in any 3G or WiFi network state. It allows consumers and merchants to pay and receive payments anywhere and save the corresponding consumption information, thereby greatly reducing the technical threshold and hardware requirements for card consumption.

Business model

In addition to being small and easy to operate, consumers and merchants choose Square Card Reader because it has other obvious advantages: for example, the bills it provides are settled on a daily basis, while banks usually settle on a monthly basis.

Second, Square's hardware cost is quite low. In comparison, Verifone costs $900 for a credit card terminal, while Square only needs an iOS or Android terminal (iPod touch is only $299, and the Square card reader is free). For consumers, it has a thoughtful service that bill payments are sent by email and will be attached with GPS positioning locations for easy verification of records; and for merchants, it can store and analyze user consumption information, making business transactions easier.

The most important thing is that Square's handling fee is quite low. In order to encourage consumers to use Square to swipe cards, any card swipe behavior only charges a fee of 2.75%, while manually entering the account number is 3.5% plus 15 cents; recently it has launched a new optional fee payment method: paying $275 per month, you can swipe cards as many times as you want (no more than $400 per transaction, no more than $250,000 per year).

Square's business model is as simple and clear as its machines. The costs mainly come from three aspects: first, the transaction commissions delivered to various banks, second, the hardware costs of Square card readers, and the development and operation costs of the team. The main source of income is transaction commissions.