Square, Inc.

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Square, Inc.
Founded2009 (2009)[1]
HeadquartersSan Francisco, United States[2]
Area servedUnited States, Canada, and Japan
Founder(s)Jack Dorsey
Jim McKelvey
Key peopleJack Dorsey (chief executive officer)
Jim McKelvey (chairman)
Sarah Friar (chief financial officer)
IndustryMobile Payments, Point of Sale
ProductsSquare Register, Square Wallet, Square Market, Square Cash, Square Reader, Square Stand
Alexa rankpositive decrease 5,548 (April 2014)[3]
LaunchedMay 2010
  (Redirected from Square (application))
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This article is about the electronic payment service. For the video game company, see Square (company).
Square, Inc.
Founded2009 (2009)[1]
HeadquartersSan Francisco, United States[2]
Area servedUnited States, Canada, and Japan
Founder(s)Jack Dorsey
Jim McKelvey
Key peopleJack Dorsey (chief executive officer)
Jim McKelvey (chairman)
Sarah Friar (chief financial officer)
IndustryMobile Payments, Point of Sale
ProductsSquare Register, Square Wallet, Square Market, Square Cash, Square Reader, Square Stand
Alexa rankpositive decrease 5,548 (April 2014)[3]
LaunchedMay 2010

Square, Inc. is a merchant services aggregator and mobile payments company based in San Francisco, California. The company markets several software and hardware products and services, including Square Register and Square Wallet. The company was founded in 2009 by Jack Dorsey and Jim McKelvey and launched its first app and service in 2010.

Square Register allows individuals and merchants in the United States, Canada, and Japan to accept offline debit[discuss] and credit cards on their iOS or Android smartphone or tablet computer. The app supports manually entering the card details or swiping the card through the Square Reader, a small plastic device which plugs into the audio jack of a supported smartphone or tablet and reads the magnetic stripe. On the iPad version of the Square Register app, the interface resembles a traditional cash register.

Square Wallet allows customers to set up a tab and pay for their order simply with their name (or a barcode) using a stored credit, debit, or gift card.

In August 2012, Starbucks announced it would use Square to process transactions with customers who pay via debit or credit card. In February 2014, Whole Foods Market announced it would use Square Register in select stores' sandwich counters, pizzerias and coffee, juice, wine and beer bars.[4]

In March 2014, Square announced it will start allowing sellers to accept bitcoin on their own storefronts through Square Market. The seller will take no risk on Bitcoin value fluctuations.[5]



The original inspiration for Square occurred to Jack Dorsey in 2008 when James McKelvey (a St. Louis friend of Dorsey at the time) was unable to complete a $1,000 sale of his glass faucets and fittings because he could not accept credit cards.[6]

The name "Square" refers to the Square card readers which are square in shape. The name also refers to the idiomatic term for settling debts: "squaring up". Several other names were also considered but rejected, including squirrel, stash and wallet. The name Squirrel was in use during a meeting the company had with Apple, wherein Scott Forstall, SVP of iPhone Software, informed Jack Dorsey he should change the name.[7][8]



Square Reader[edit]

Square Reader and iPhone

The Square Reader was the first product released by Square, and is used to accept credit card payments by connecting to a mobile device's audio jack. Square's original reader consisted of a simple read head directly wired to a 3.5mm audio jack, through which unencrypted, analogue card information was fed to smartphones for amplification and digitization.[9] Square's technology is PCI compliant and Verisign certified.[10]

In April 2011, rival payment company VeriFone claimed that the Square system was insecure, and that a "reasonably-skilled" programmer could write a replacement app which could conceivably use the Square device to skim a credit card and return its details. VeriFone posted a demonstration video and sample skimming app to its Web site.[11] Dorsey called VeriFone's claims "neither fair nor accurate", noted that the card data could be gathered visually from the card, and said that the claims ignored the fraud protection provided by card issuers.[12]

Square currently[when?] uses strong encryption on its devices, including SSL and PGP.[10] Its cryptographic keys are at least 2048 bits in length.[10] Card numbers, magnetic stripe data, or security codes are not stored on Square client devices.[10] Square follows the guidelines issued by OWASP.[10]

Square Stand[edit]

In June 2013, Square unveiled Square Stand at a press event at Blue Bottle coffee in San Francisco. Square Stand aims to turn the Apple iPad into a more complete point of sale system. It makes use of a larger reader and a rotatable base that allows the stand to be swiveled around. Square Stand took more than a year to develop and the team of around 15 was led by Jesse Dorogusker former Apple director of engineering for iPhone, iPod, and iPad accessories at Apple.[13] The Square Stand works with iPad 2, iPad 3rd generation (30-pin connector).


Square Register[edit]

Square Register is point of sale software aimed at replacing traditional credit card terminals and cash registers.

Square Wallet[edit]

Square Wallet allows buyers to use their mobile devices to pay merchants that make use of Square's POS. The app is currently[when?] supported on iOS and Android.

Square Market[edit]

In July 2013, Square launched Square Market which allows sellers to create a free online storefront with online payment processing functionality.[14]

Square Cash[edit]

In October 2013, Square launched Square Cash, which allows person-to-person money transfer over e-mail. The service allows users to send money by drafting an e-mail, including the dollar amount in the subject of the e-mail, and CC'ing Square Cash, initiating a transfer directly to the recipient's debit card.


Introduced in early 2010 by Square Inc.,[15] the Square application is available for the iPhone, iPod Touch, iPad and Android-based mobile phones.[16] Square was co-founded by Twitter creator Jack Dorsey.[15] Dorsey also serves as chief executive officer and Sarah Friar serves as chief financial officer.[15]

Square has more than 600 employees.[17]

At the TechCrunch Disrupt conference in May 2011, Square announced the release of two new apps, Square Card Case (later rebranded as Square Wallet[18]) and Square Register.

Square's office is located on Market Street in the South of Market neighborhood of San Francisco.[19]

Areas served[edit]

Square has been available in the United States since 2010 and became international when the company launched in Canada at the end of 2012. In May 2013, Square announced that its mobile payments service was available in Japan after agreeing to a partnership with Sumitomo Mitsui Card Corporation. The fee for transactions would be 3.25% in Japan.[20]


Square received angel investment from Marissa Mayer, Kevin Rose, Biz Stone, Dennis Crowley, Shawn Fanning, Ed Cramer, MC Hammer, and Esther Dyson.[21] Since then, it has raised several additional rounds of funding:

The company's valuation in January 2014 was $5 billion.[22]

Business model[edit]

As of March 2013, Square provides its card readers to its users for free.[23] The Square app is also freely downloadable from the App Store and the Google Play Store.

Square charges a fee of 2.75% on every credit card transaction. This rate is higher than the rate charged by conventional credit card processors, but Square claims that the conventional credit card processors also include many hidden costs which are never disclosed to the customers. Square does not have any additional fees beyond the 2.75% per swipe (or the 3.50% plus $0.15 cost per manually-entered transaction) - there are no monthly fees or set-up costs. Square claims that its costs are, on average, lower than the costs charged by the conventional credit card processors.[24] Square is regarded as a useful app for entrepreneurs, including for example consultants, food truck operators, and traditional retailers.[25]

On November 8, 2013, Square announced it was discontinuing its flat rate plan which was introduced in August 2012,[26] whereby a flat fee of $275.00 per month was charged, and was all-inclusive. The flat rate plan had been available to all merchants with under $250,000 in yearly credit card sales, and no more than $20,833 in monthly sales. When the monthly or annual maximum sales were exceeded, the plan reverted to the traditional 2.75% model.

Swiped payments are deposited directly into a user's bank account within 1-2 business days. In some instances, Square may withhold payments to its users pending issues related to chargebacks.[27]

Customer support[edit]

Square's support is handled via email, YouTube videos, a Twitter feed (@SqSupport), and an online help center. Square does not offer phone support for customers, including for emergency situations. Once criticized for delays in dealing with customer problems, it claims that current[when?] turnaround time to customer inquiries is less than 24 hours.[28]


Business Insider praised the product for its "ease of use, simplicity and elegance". Business Insider favorably compared Jack Dorsey with Steve Jobs for what they call his "entrepreneurial vision and charisma".[29][30]

The Next Web praised Square's website squareup.com for its design and aesthetic appeal.[31]

The product was also showcased at Apple's iPad 2 event.[32]

GigaOM called the product a disruptive innovation.[33]

Banned transactions[edit]

In May 2013, Square announced it would no longer allow firearms-related transactions to be performed using its devices or software. Founder Jack Dorsey amended the terms of service for retailers to ban sales of "firearms, firearm parts or hardware, and ammunition; or ... weapons and other devices designed to cause physical injury". He denied that this move was related to the increased debate over gun control.[34]


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  14. ^ "Square Market". 
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  19. ^ Evangelista, Benny (October 14, 2013). "New offices give Square workers lots of options". SFGate. Retrieved January 6, 2014. 
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  34. ^ Sperry, Todd (2013-05-13). "Mobile-payment service Square blocks gun sales". Money.cnn.com. Retrieved 2013-12-05. 

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