Accepting card payments with a mobile phone is becoming as American as baseball and apple pie now that Wal-Mart Stores Inc. is selling the Square Inc. reader that turns any smartphone into a card-acceptance device.
A visit to the store locator on the Square website indicates Wal-Mart has joined Best Buy Co. Inc., RadioShack Corp. and Apple Inc. stores in offering the reader.
The move into Bentonville, Ark.-based Wal-Mart makes the Square reader available in an additional 3,800 U.S. stores and literally puts it within reach of the masses in nearly every American city and hamlet.
Square already had shipped 800,000 of the devices, says Todd Ablowitz, president of Centennial, Colo.-based Double Diamond Group LLC. Anyone from babysitters and gardeners to plumbers and carpenters may use them, he notes.
The devices cost a refundable $9.95, and users pay 2.75% of each if they swipe a card or 3.5% plus 15 cents when the merchant enters the numbers manually, the Square website says.
Some industry observers once touted the advent of mobile payments as an opportunity for independent sales organizations to offer services to a large, new untapped market of micromerchants too small or too nomadic to use card terminals. But the picture seems murkier than that, observers now say.
For one thing, ISOs and agents have no role in the Square approach to doing business. Consumers buy the devices from retailers directly, so sales agents do not need to call on them to offer card-acceptance services.
Besides, many ISOs already were finding out that some small or “micro” merchants simply do not generate enough revenue to justify the work of signing them up for services, says Ablowitz.
ISOs should look closely at the business case for catering to micromerchants, advises Bill Ramsey, vice president of business development for Apriva, a Scottsdale, Ariz.-based vendor.
The opportunity for ISOs probably lies with retailers a bit bigger than the micromerchants now beginning to use Square, Ablowitz says. ISOs’ merchants need point-of-sale systems, value-added services and help with charge-backs–not just card acceptance, he says.
Launched in 2009 by Twitter co-founder Jack Dorsey, San Francisco-based Square has attracted more than $100 million in venture capital (
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