Square Buys Social Payments Company Evenly, Adding P2P Muscle

Square has purchased Evenly, a company that provides services for person-to-person payments. The move heightens Square's competition with PayPal and bolsters its own Square Cash product.

The Evenly team will work on seller initiatives, Square says. Square did not provide further detail, such as the size of the transaction, or how the companies may combine their technology to build new products. Evenly did not return a request for comment by deadline.

"Evenly’s app made it easy for anyone to send or collect payments from friends, anywhere, anytime. But more importantly, the team showcased the importance of prioritizing experience over the technical aspects of the product itself. In their own words, 'Life is about sharing experiences, not splitting transactions,'” wrote Gokul Rajaram, project engineering lead for Square, in a blog post.

Evenly's technology talent is a big part of the deal, says Phil Philliou, a payments consultant.

"It appears to be [an] acqui-hire deal to help Square Cash," an email-based P2P payment product Square launched in October, Philliou says.  "Smart move by Square to bring more smart DNA into their engineering and design teams," he says.

Evenly was founded in 2012. The company's technology enables members of groups to send or request money from each other on mobile devices or on the Web. When a user requests funds, Evenly builds a dashboard that enables the user to track progress, send reminders, and make edits and updates.

Users can create different payment tiers within the same request so people can pay what they owe as part of a larger expense. People send funds via email or Facebook messages. Consumers can also use Facebook to build a larger list of contacts that are part of their personal payment network.

The recently launched Evenly Rewards presents users with a game—the user flips over one of three cards to obtain cash back or discounts at participating merchants.

Evenly's website indicates that it plans to shutter its service on January 15. It recommends that its customers begin using Square Cash for P2P payments.

Evenly's model is similar to Venmo, a company Braintree purchased in 2012. EBay and PayPal have since announced plans to acquire Braintree. Drawing on social networking, Venmo users send funds to each other, along with notes on the method of payment and the reason for that payment.

Square's purchase of Evenly echoes PayPal's strategy of buying other payment companies to absorb their talent and technology. PayPal's president, David Marcus, joined PayPal through its 2011 purchase of Zong, which he founded.

While Square and Evenly are both active in P2P, the Evenly acquisition sets up Square for growth in a payments market driven by social tools.

"P2P payments aren't new, in fact 17% of mobile consumers and a full 36% [of] 25-34 year olds with a mobile phone have made a mobile P2P transfer in the past 90 days," says Daniel Van Dyke, a research specialist at Javelin Strategy and Research. "However, the user interface and marketing segments of Evenly both point toward a specific use case for mobile P2P—making buying, lending and selling a more social experience."

With Evenly, Square could socialize the "sharing economy," providing a user experience that lends itself toward commerce with friends, Van Dyke says. "For example, Uber lets you splits a fare. But what if you want to split a cab with your friend, who doesn't have the money but is good for it? Square could allow the lender to take the bill, and Evenly could send reminders to the borrower to pay it back."

There may be a market for very small merchants who want to collect from a group by using a P2P model, though that market may not be that large, says Richard Crone, a payments consultant.  

"It's an acquisition of talent, more than infrastructure. And Square is in need of payment talent? In P2P? That raises a red flag," Crone says.