Square Will Be One Of 3 Major Business Platforms Or….

Square Will Be One Of 3 Major Business Platforms Or….

One of the most common questions I get as a payment services professional is, “What do you think of Square?”. I often express my respect for them as they have helped millions of micro-merchants enable mobile payments, and access funding while they’ve built their business.

What I appreciate about Square and their CEO Jack Dorsey, is they started in 2009 to solve a problem. Jack’s friend, Jim McKelvey, missed out on a $2,000 sale of his glass faucets he was trying to sell because he didn’t have a way to accept credit cards, inspiring them to come up with a way to help others with the same problem.

If You’re Wondering Where Square Is Headed, I’ll Tell You.

I believe the financial industry is undergoing a tremendous makeover with the convergence of lending, payments, point of sale, marketing, accounting systems, and banking and I think Square helped open the door to the idea of a payments provider owning 100% of the services provided to a merchant.

As a result of merchants being open to this scenario, we’ve seen more POS systems begin to follow Square’s lead on owning more of the merchant relationship. Point of Sale systems like Toast, Clover, and Cake, which all launched after Square, all require you to process on their payments platform.

This is just the beginning and it won’t end with payments. Let me explain why.

Remember The Automobile Industry?

When the automobile industry took root in the 1890s in America, there were hundreds of car manufacturers and by 1930 the market in America was dominated by 3 manufacturers: Ford, General Motors, and Chrysler. The others completely went out of business.

Do you remember the Austin Automobile? Probably not. It was a manufacturer in Michigan from 1901-1921 and they manufactured a 1,000 units before closing their doors.

The same will happen in 10 years when someone asks a new restaurant owner if they’ve ever heard of First Data, Heartland, or TSYS. They will not have ever been heard of due to the need of legacy providers to consolidate in order to compete with new entrants like Square and Stripe.

Where It’s Going.

With financial institutions beginning to understand the threat that new providers like Square and Stripe bring to the market, along with other technology initiatives like Blockchain, Artificial Intelligence, and IoT, payments providers are consolidating, and banks, like Bank of America, are rethinking their payments future.

These financial institutions will stop at nothing to compete for the control of cash flow, even if it means acquiring every relevant solution that touches the merchant. Major processing platforms like First Data, Heartland, TSYS, Vantiv, and WorldPay have all been acquired in the last 3 years. Point of Sale systems, such as Micros, MobileBytes, Dinerware, Digital Dining, Restaurant Manager, and Future POS, have all been acquired by a payments processor over the past 3 years.

These purchases were primarily about purchasing an active merchant base while these organizations attempt to build new technology that will move them into the future.  The existing technology is useless especially when it comes to achieving the outcome that the current market demands; technology that communicates across all departments of an organization while giving merchants access to the data they need to be successful.

The Future Big 3.

The future in every industry segment will, in my prediction, have 3 major providers that provide integrated business platforms that will serve as the primary platform merchants run their business from. It is not far fetched to foresee financial institutions like Bank of America building their own payment platforms and acquiring major point of sale, accounting, marketing, payroll, and software platforms to directly serve their customers.

FIS, Fiserv, and Global Payments, the institutions responsible for much of the industry consolidation, will also join them in this endeavor to deliver feature-rich solutions to the markets they want to serve and it won’t be a single solution. The future will require these organizations to deploy multiple integrated platform solutions for each segment they serve with support teams that cater to that specific niche.

Square will be met with much competition now that it has realized that micro-merchants aren’t profitable and has started to move upmarket. For Square to succeed as one of the future Big 3 providers in any market segment, much of what has made them attractive to micro-merchants will disappear. 

What Got Square Here, Won’t Get Them There.

Many industry experts have been following Square’s development and have been wondering if they will decide to become a bank. If they do, this will likely drive additional changes in the financial sector that will involve major banks and payment processors. As the convergence continues and these providers fight over merchants, Square will have to change at least 3 things:

  • Flat-rate payments will come to an end.

Square has learned that flat rate payment processing at 2.75% is a bad deal for them. Coffee shops and food trucks where the average ticket is less than $10 love this pricing because traditionally interchange costs are often 3% before the payment processor adds their markup. Square lost several million dollars doing business with Starbucks and likely won’t continue this program due to its drag on their profitability. This is why their new pricing models included a transaction fee when they launched their advanced POS and terminal offerings.

  • Software costs will increase.

Square has been patient while building their platform and in order to fund future development and deliver the returns that every public company must deliver to its shareholders, they must increase profitability. This will require them to attract and retain the best talent; this investment will require significant ongoing capital. This investment will not only be made in the area of leadership and software development, but also in regards to expanding their existing support staff. 

Restrictive agreements will likely be implemented or banished, industry-wide.

As the payments industry continues to consolidate to build new platforms that provide the experience, integrations, and features merchants want, the agreements that merchants have grown to hate, will be implemented to protect their investment. This is just an opinion, but the fact is Square has built a stable business because they offered a pretty safe and reliable service to merchants that major processors didn’t want to serve. Serving the same merchants that large financial institutions want to serve, will require Square to play hardball and this will likely include long-term contracts, or the rest of the industry will eliminate contracts entirely.

  • Specialization in key industries.

Serving an unsophisticated merchant base hasn’t required Square to develop a deeply sophisticated feature-set. This may be why small restaurants and retailers were the first markets they developed a POS offering for. Square will likely, after building deep integrations and features in this space, develop the features needed in-house or acquire other business platform assets that they can integrate their payments to serve key markets. The key thing to understand is, building a platform from scratch with deep features for a specific industry takes serious commitment and capital. Plenty of POS companies had plenty of capital behind them and turned out to be very challenging in many respects, remember Micros?

Who Will It Be?

Square, Stripe, FIS, Global, Fiserv, and other financial institutions will be jockeying for position in the industries they want to serve. The key thing to understand is, being a payments platform that does everything for all merchants won’t make them one of the 3 major providers in a specific segment, each provider will have to dedicate significant time, teams, and capital to building and developing first-class solutions for the market they want to serve. It will be through specialization, not generalization. The few specialized solutions will own 80% of the market, while dozens of generalized solutions will serve the remaining 20% of the market.

You might be asking yourself, “What does the future look like for my business software provider”? I think there will continue to be tremendous growth in the ISV space with many major players being acquired by the financial institutions that own the banking, payments, and technology relationships. With ISV’s wanting more payments revenue and payments providers needing something other than merchant processing, this is inevitable. ISV’s will be wholly owned subsidiaries of financial institutions purchased for their IP and industry-specific tools and knowledge. Instead of ISV’s partnering with PayFacs like WePay, Stripe, or ProPay, they will be owned by the parent company of these solutions.

The challenge merchants face at this point in time, is determining which industry provider they are willing to partner with long-term to help them compete in their respective industry. Purchasing what appears to be an okay solution today, won’t be enough as customers require a dynamic purchasing experience from businesses they do business with. Having the right technology, support, and partners will be key for businesses, and the business platform they select will be key in assisting their differentiation in the marketplace.

In 5 years, I believe Square will be one of the “Big 3” business platforms serving a specific niche industry or they will serve the remaining 20% of merchants that don’t demand deep industry-specific features and I believe the same about Stripe, PayPal, Global, FIS, and Fiserv. 

How Should You Approach Your Technology?

As a business owner that is in the process of determining which systems you will use to take your business into the future, it’s important for you to keep a pulse on where technology is going as it will likely impact your ability to attract and retain the right employees and customers. It can also help you navigate the technology decisions you will need to make in the coming future, whether that be for point-of-sale, payment processing, marketing, or even accounting.

Knowing the right questions to ask will be key to ensuring your business thrives as our market continues to change. Having a partner like the Northwest Advisory Group, will also be to your advantage as you make these tough decisions and enter into agreements with newly formed business technology platforms. If you are wondering what platforms are likely to be good for your business, we’d love to start the conversation with you.

Stripe, Square, and PayPal Users Are Doing This To Save Serious Money

Stripe, Square, and PayPal Users Are Doing This To Save Serious Money

If you’re like most business owners using Square, PayPal, or Stripe to accept credit cards, you are likely looking for ways to grow your business while also controlling your expenses. Accepting credit cards is one of the top 5 expenses a business has regardless of the credit card processor they choose.

Overspending on credit card processing can prevent you from being able to properly invest in technology and marketing solutions that will help you grow your business.

The Advantages & Disadvantages of Stripe, Square, and PayPal

Square, Stripe, and PayPal are great credit card processing solutions. The advantage of using one of these systems is very straightforward. Their modern sleek interfaces make them easy to use, their streamlined underwriting allows you to launch within minutes, and a flat 2.9% +.30 per transaction make them easier to understand. This can be great for a new business owner that doesn’t to take a chance on working with the wrong credit card processor or if they don’t plan on sales exceeding $5,000 per month.

The downsides of working with one of these platforms are glaring for businesses exceeding $5,000 per month in sales. For businesses exceeding $5,000 in sales monthly, they will likely overspend to the tune of hundreds, if not thousands, of dollars per month depending on their size. They will pay a premium to accept credit & debit cards while still not maintaining control of their customer data or have live customer support.

A Real Example: eCommerce Merchant Using Traditional Processor w/Authorize.net

We recently set up an eCommerce merchant account for a local retailer using Shopify and wanted to share the results we are helping them get when it comes to controlling their payment processing expenses. As you can see below, this merchant had sales of $35,936.99 with total fees of $865.57. They also paid $41.56 for Authorize.net, so their true total cost of acceptance for the month was $907.13, bringing their effective rate to 2.52%.

Had this merchant been using Stripe, Square, or PayPal for their online payment processing, they would’ve paid 2.9% +.30 cents per transaction. Let’s dive deeper to see what the outcome would have been. Below you will see the true breakdown of how many transactions they processed for each card type (Visa, MasterCard, American Express, Discover, etc.).

When we compare this merchant to Stripe, Square, and PayPal pricing we see that they would’ve paid 2.9% on net sales of $35,936.99, which would have cost them $1,042.17. There would have also been a $.30 charge per transaction which would have cost them an additional $99.60, bringing their total cost to $1,141.77, an effective rate of 3.18%!

Using Square, PayPal, or Stripe would’ve cost this merchant an additional .66% or an additional $237.18 per month. The reason these platforms are more expensive for e-commerce merchants is that debit cards often cost the business less than 1%. Per the image above, this merchant accepts more debit cards than American Express credit cards and almost as much as MasterCard credit cards.

Why Debit Cards Are So Much Less Expensive

In this article, I talk about the impact of the Durbin Legislation on the cost of accepting debit cards and why businesses haven’t been able to capitalize on this major advantage. In the image below you can see the true cost of accepting debit cards and where Square, PayPal, and Stripe profit most on most of their merchants. With most debit cards having a true cost of .0005% and .22 cents per swipe, these providers earn a mark-up of 2.65% + .08 cents when you factor in other costs that must be paid to debit card issuers like Wells Fargo, US Bank, Chase, and other banks and card brands. The total interchange (fees paid to the debit card issuer) for $4,695.49 was only $17.73 or .38%. Even when the fees paid to Visa and the payment processor are factored in, their total costs for accepting Visa debit cards total $26.97 or .0057%. This is where the majority of Square, PayPal, and Stripe users can save a considerable amount of money. Being able to accept debit cards in your business for almost a half of one percent and being able to recapture one-half percent of your sales annually can help you redirect that additional capital to important areas in your business needed to grow.

Debit cards are inexpensive to process for two main reasons, the first reason is there is no risk in accepting debit cards. If the money is available, the transaction is approved. The other reason is there are no rewards attached to a debit card to incentive consumer use. Because there are no rewards attached, the interchange fees are very low. It is only expensive in an environment where your average sale is less than $15. This is where Square has traditionally lost money on its users which has caused them to add a transaction fee to their new POS solutions.

What You Can Do

Securing the right type of merchant account will allow you to streamline your credit card processing costs and will allow you to leverage your profitability to dominate other merchants that are using these payment providers.

The Square, Stripe, and PayPal merchants that are saving serious money on their credit card processing are switching to payment providers that pass through the true lower cost of accepting debit cards to them so they can run a more efficient business.

If you’d like to evaluate whether you’re using the right solution for your business, don’t hesitate to contact us on our website or request a custom quote. We may be able to save you some SERIOUS money!

Square’s, Not So Private, Privacy Policy

Square’s, Not So Private, Privacy Policy

If you’ve ever wondered what’s really behind this beautiful company that has no apparent downsides, you’re not alone. For years I would recommend Square to small startups that were looking into simple payment processing solutions until I read their actual privacy policy.

It’s very lengthy, as it explains all of the rights you don’t have as a user of their system, and the many aspects of your life, and your employees and customers, they will know all they want to know about. This statement also includes all the third parties they work with based in the United States and other countries like Japan for that matter.

I hope you enjoy the read, it’s juicy!

If you want to know what this all means for you as an entrepreneur, scroll to the end of this article where I summarize it.

Privacy Policy for Users Who Apply or Sign Up for a Square Account

For users who DO NOT apply or sign up for a Square Account, click here.

Last updated: May 27, 2016

This Privacy Policy describes the information Square, Inc. and our affiliates (collectively, “Square,” “we,” and “us”) collect when a person or business (“you,” “your”) applies or signs up for a Square account.

By applying or signing up for a Square account, including through a computer or mobile device (“device”), you accept the terms of this Privacy Policy and consent to our collection, use, disclosure and retention of your information as described herein (including to contact you), and for all other purposes permitted under applicable personal information privacy statutes, credit bureau reporting rules, anti-spam legislation, and consumer protection laws.


We may amend this Privacy Policy from time to time by posting a revised version and updating the “Last updated” date above. The revised version will be effective at the time we post it. We will provide you with reasonable prior notice of substantial changes in how we use your information, including by email at the email address you provide. Where these changes would cause material detriment to you, you may, of course, cancel your account at any time. We encourage you to review this Privacy Policy whenever you access or use in any manner any Square application, product, service, feature, technology, content, or website (collectively, “Services”) to stay informed about our information practices and the choices available to you and to contact us if you have any questions about these changes. Your continued use of our Services constitutes your acceptance of any amendment of this Privacy Policy.

Collection of Information

Our Services can be used by a broad range of industries in connection with their products, services, activities and administrative functions, whether they are involved in government, retail, health, politics, human resources, technology or anything else. Accordingly, a broad range of information (including information about you) may be uploaded to or sent through our Services.

Without information about you, we may not be able to provide you with the Services or the support you request.

Our website and Services are not targeted or directed at children under the age of 13 and do not knowingly collect or store any personal information from children under the age of 13.

Information You Provide

We collect information you provide when you apply or sign up for a Square account and when you provide information as part of our identity or account verification process. We collect information about you, including:

  • Identification information, such as your name, email address, mailing address, phone number, photograph, birthdate, passport, driver’s license, Social Security, Taxpayer Identification, or other government-issued identification numbers;
  • Financial information, including bank account and payment card numbers;
  • Tax information, including withholding allowances and tax filing status; and
  • Other historical, contact, and demographic information.

We also collect information you upload to or send through our Services, including:

  • Information about products and services you sell (including inventory, pricing and other data);
  • Information you provide about you or your business (including appointment, staffing availability, employee, payroll and contact data); and
  • Information you provide to a Seller using our Services, for example if you are an employee whose employer uses Square Payroll (including hours worked and other timecard data).

Some of the information we collect is collected to comply with applicable laws and regulations, including anti-money laundering laws.

We collect information you provide when you participate in contests or promotions offered by Square or our partners, respond to our surveys or otherwise communicate with us.

Information We Collect from Your Use of our Services

We collect information about you when you use our Services, including:

  • Transaction Information. When you use our Services to make, accept, request or record payments or money transfers, we collect information about when and where the transactions occur, the names of the transacting parties, a description of the transactions, the payment or transfer amounts, billing and shipping information, and the devices and payment methods used to complete the transactions.
  • Location Information. Through our applications, we collect information about the location of your device. For more information and to learn how to disable collection of location information, please see “Your Choices” below.
  • Device Information. We collect specific information about your device when you access our Services, including your hardware model, operating system and version, unique device identifier, mobile network information, and information about the device’s interaction with our Services. We may also identify other software running on the device for anti-fraud and malware-prevention purposes (but will not collect any content from such software).
  • Use Information. We collect information about how you use our Services, including your access time, browser type and language, and Internet Protocol (“IP”) address.
  • Information Collected by Cookies and Web Beacons. We use various technologies to collect information when you use our Services, including sending cookies to your device and using web beacons. Cookies are small data files that are stored on your hard drive or in your device memory when you visit a website or view a message. Among other things, cookies support the integrity of our registration process, retain your preferences and account settings, and help evaluate and compile aggregated statistics about user activity. For more information and to learn how to block or delete cookies used in the Services, please see “Your Choices” below. We also may collect information using web beacons. Web beacons are electronic images that may be used in our Services or emails. We may use web beacons to deliver cookies, track the number of visits to our website, understand usage and campaign effectiveness, and determine whether an email has been opened and acted upon.
Information We Collect from Other Sources

We also collect information about you from third parties, including third-party verification services, credit bureaus, mailing list providers, and publicly available sources. In some circumstances, where lawful, this information may include your government-issued identification number. By applying or signing up for a Square account, you authorize and consent to our obtaining from, and disclosing to, third parties, from time to time, any information about you in connection with the processing of any credit investigation, identity or account verification, fraud detection, or collection procedure, or as may otherwise be required by applicable law. This includes, without limitation, the receipt and exchange of account or credit-related information with any credit reporting agency or credit bureau, where lawful, and any person or corporation with whom you have had, currently have, or may have a financial relationship, including without limitation past, present, and future places of employment and personal reporting agencies.

Third-Party Advertising and Analytics

We may allow third-party service providers to deliver content and advertisements in connection with our Services and to provide anonymous site metrics and other analytics services. These third parties may use cookies, web beacons, and other technologies to collect information, such as your IP address, identifiers associated with your device, other applications on your device, the browsers you use to access our Services, webpages viewed, time spent on webpages, links clicked, and conversion information (e.g., transactions entered into). This information may be used by Square and third-party service providers on behalf of Square to analyze and track usage of our Services, determine the popularity of certain content, deliver advertising and content targeted to your interests, and better understand how you use our Services. The third-party service providers that we engage are bound by confidentiality obligations and other restrictions with respect to their use and collection of your information.

This Privacy Policy does not apply to, and we are not responsible for, third-party cookies, web beacons, or other tracking technologies, which are covered by such third parties’ privacy policies. For more information, we encourage you to check the privacy policies of these third parties to learn about their privacy practices. For more information about targeted advertising specifically, please visit http://www.aboutads.info/choices. To learn about how to manage cookies, please see “Your Choices” section below.

Use of Information

We may use information about you to provide, maintain, and improve our Services, such as:

  • Processing or recording payment transactions or money transfers;
  • Displaying historical transaction or appointment information;
  • Developing new products and Services; and
  • Delivering the information and support you request, including technical notices, security alerts, and support and administrative messages.

We may use information about you to improve, personalize and facilitate your use of our Services. For example, when you sign up for a Square account, we may associate certain information with your new account, such as information about other accounts you had or currently have with Square, and prior transactions you made using our Services. We also may use information about you to measure, customize, and enhance our Services, including the design, content, and functionality of our applications and websites, or to track and analyze trends and usage in connection with our Services.

We may use information you provide to connect you with people you already know. For example, you may upload contact information from your address book through the Square Cash mobile application. We will match the contact information you provide to the information provided by other users of Square Cash in order to provide and improve the Square Cash Service, including making it easier to find contacts to whom you may send or request payments using Square Cash.

We may use information about you to send you news and information, or to conduct surveys and collect feedback, about our Services and to communicate with you about products, services, contests, promotions, discounts, incentives, and rewards offered by us and select partners, based on your communication preferences and applicable law. We also may contact you to resolve disputes, collect fees, and provide assistance for problems with our Services or your Square account.

We may use information about you:

  • To protect our rights or property, or the security or integrity of our Services;
  • To enforce the terms of our General Terms or other applicable agreements or policies;
  • To verify your identity (e.g., some of the government-issued identification numbers we collect are used for this purpose);
  • To investigate, detect, and prevent fraud, security breaches, and other potentially prohibited or illegal activities;
  • To comply with any applicable law, regulation, legal process, or governmental request;
  • For any other purpose disclosed to you in connection with our Services.

We may, and we may use third-party service providers to, process and store your information in the United States, Japan, and other countries.

Sharing of Information

We may share information about you as follows:

  • With our group companies, including our parent company, Square, Inc., and other affiliates, for the purposes outlined above;
  • With third parties to provide, maintain, and improve our Services, including service providers who access information about you to perform services on our behalf (e.g., fraud prevention, identity verification, and fee collection services), as well as financial institutions, payment networks, payment card associations, and other entities in connection with the payment or money transfer process;
  • With third parties that run advertising campaigns, contests, special offers, or other events or activities in connection with our Services;
  • With other users of our Services with whom you interact through your own use of our Services. For example, we may share information when you make or accept a payment, appointment or money transfer using our Services;
  • In connection with, or during the negotiation of, any merger, sale of company stock or assets, financing, acquisition, divestiture, or dissolution of all or a portion of our business;
  • If we believe that disclosure is reasonably necessary (i) to comply with any applicable law, regulation, legal process or governmental request (e.g., from tax authorities), (ii) to enforce or comply with the terms of our General Terms or other applicable agreements or policies, (iii) to protect our rights or property, or the security or integrity of our Services, or (iv) to protect us, users of our Services or the public from harm or potentially prohibited or illegal activities; or
  • With your consent.

We also may share aggregated information with third parties that does not specifically identify you or any individual user of our Services.

Your Choices

Personal Information

You may access, change, or correct information about you by logging into your Square account at any time or by making a request to us using the contact details below, in which case we may need to verify your identity before granting access or otherwise changing or correcting your information.

Deactivating Your Account

If you wish to deactivate your Square account, you may do so by logging into your Square account or by emailing us using the contact details provided below. Square generally retains information about you only as long as reasonably necessary to provide you the Services. However, even after you deactivate your Square account, we may retain archived copies of information about you and any transactions or Services in which you may have participated for a period of time that is consistent with applicable law, or as we believe is reasonably necessary to comply with applicable law, regulation, legal process, or governmental request, to prevent fraud, to collect fees owed, to resolve disputes, to address problems with our Services, to assist with investigations, to enforce our General Terms or other applicable agreements or policies, or to take any other actions consistent with applicable law.

Location Information

In order to provide certain mobile applications, we may require location information, so if you do not consent to collection of this information, then you cannot use our corresponding Services. You can stop our collection of location information at any time by changing the preferences on your mobile device. If you do so, some of our mobile applications will no longer function. You also may stop our collection of location information via mobile application by following the standard uninstall process to remove all Square mobile applications from your device.


We try to make your experience with Square simple and meaningful. When you access or use the Services, our web server may send a cookie to your device. Certain cookies we use last only for the duration of your web or application session and expire when you close your browser or exit the application. Other cookies are used to remember you when you return to use the Services and, as such, will last longer.

We may use cookies to:

  • Remember that you have visited us or used the Services before. This means we can identify the number of unique visitors we receive, which allows us to make sure we have enough capacity to accommodate all of our users.
  • Customize elements of the promotional layout and/or content of our website or application.
  • Collect anonymous statistical information about how you use the Services (including the length of your web or application session) and the location from which you access the Services, so that we can improve the Services and learn which elements and functions of the Services are most popular with our users.

Some of the cookies used in the Services are set by us, and others are set by third parties who deliver services on our behalf.

Most web and mobile device browsers are set to automatically accept cookies by default. However, you can change your browser settings to prevent automatic acceptance of cookies, or to notify you each time a cookie is set.

You also can learn more about cookies by visiting http://www.allaboutcookies.org, which includes additional useful information on cookies and how to block cookies on different types of browsers and mobile devices. Please note, however, that by blocking or deleting cookies used in the Services, you may not be able to take full advantage of the Services.

Do Not Track

Do Not Track (“DNT”) is an optional browser setting that allows you to express your preferences regarding tracking across websites. We currently do not respond to DNT signals. We may continue to collect information in the manner described in this Privacy Policy from web browsers that have enabled DNT signals or similar mechanisms.

Promotional Communications

You may opt out of receiving promotional messages from Square by following the instructions in those messages or by changing your notification settings by logging into your Square account. If you decide to opt out, we may still send you non-promotional communications, such as digital receipts and messages about your account or our ongoing business relations.

California Privacy Rights

California law permits residents of California to request certain details about information we disclose to third parties for direct marketing purposes. If you are a California resident and would like to request this information, please contact us at the address listed below.


We take reasonable measures, including administrative, technical, and physical safeguards, to protect your information from loss, theft, misuse, and unauthorized access, disclosure, alteration, and destruction. We hold information about you at our own premises and with the assistance of third-party service providers. We restrict access to personal information to those Square employees, contractors, and agents who need to know that information in order to transmit, store, or process it, who are subject to contractual confidentiality obligations consistent with this Privacy Policy, and who may be disciplined or terminated if they fail to meet these obligations. Our third-party service providers store and transmit personal information in compliance with this Policy and other appropriate confidentiality and security measures.

Nevertheless, Square cannot guarantee that unauthorized third parties will never be able to defeat our security measures or use your personal information for improper purposes. In the event that any information in our possession or under our control is compromised as a result of a security breach, we will take reasonable steps to investigate the situation and, where appropriate, notify those individuals whose information may have been compromised and take other steps in accordance with applicable laws or regulations.

For more information about our security practices, please visit https://squareup.com/security.

What This All Means

If you read this entire policy and the separate policy for other users, I owe you a cup of coffee!

From what I understand of the article, Square controls all data that is entered into the Square system including information about your customers, your employees, and most importantly, YOU. They also have a right to share that data with any of the third parties they work with for any purpose they see fit.

Here’s more bad news.

Square doesn’t allow you to export the customer data for analytics & marketing, while they grant full access to third parties that reach as far as Japan, to do just that.

Maybe we will find out one day who in Japan has access to your personal information?

Is Square Bullying Entrepreneurs?

Is Square Bullying Entrepreneurs?

According to an article published by TechCrunch, we’re in the midst of a great revolution in the technology and payment processing industry. With the rapid advancements taking place with payments, social media, eCommerce, email, and text messaging all converging on one device, business owners finally have available to them the opportunity to get an actual ROI when it comes to credit card processing, unless they are using Square.

This is an opportunity many business owners, especially in the restaurant and retail space, are completely missing the boat on because it has to do with big data and analytics, something they probably aren’t all that interested in. The light bulb in my head turned on when I read this paragraph though:

Payment companies can utilize data from existing transactions to generate more transactions. Companies who maintain a direct relationship with the consumer — such as American Express, PayPal, Square, Discover, etc — are in the perfect position to serve as an Amazon recommendation system for “everything.” Did you buy a tennis racket at Sports Authority? How about tennis lessons with Saul the tennis pro, at a discount thanks to your purchase of a tennis racket, only redeemable with the same payment instrument? You weren’t searching for Saul, and you wouldn’t want an unsolicited email from Saul, but seeing an advertisement for Saul shortly after buying a tennis racket (say, on your purchase receipt) would likely produce a response. It’s a way to preempt search for a large class of “secondary” purchases (e.g., charcoal after buying a grill; tennis balls after buying a tennis racket, etc), in a “pull” based way.

In a nutshell, payment processing companies can leverage cardholder data to drive additional sales by collecting the purchase data and remarketing additional products and services to the consumer based on their purchase history.

You’re probably wondering, what does this have to do with my Square Register? I’ll get to that but before we get there, let’s talk a little bit about the value of an email address. Here’s what Neil Patel, co-founder of KissMetrics and Top 10 marketer according to Forbes, had to say about email:

“Out of all the channels I’ve tested as a marketer, email continually outperforms most of them. Not only does it have a high conversion rate, but as you build up your list you can continually monetize it by pitching multiple products. Just look at e-commerce sites like Amazon, one way they get you to continually buy more products from them is by emailing you offers on a regular basis.”

So what does this have to do with Square?

Well when you decided to plug your Square POS system in at your place of business, you decided to give up ownership of your most valuable asset, your client list, and their payment data. As your customers frequent your business over the next several years, they’ll ask you to email or text their receipts, a trend that is rapidly increasing as consumers continue to ditch paper and rely on mobile devices, tablets, and apps to organize their finances.

This is data that you can monetize to grow your own business and create unique experiences that allow you to further differentiate your business from your competitors. Data you can use to deepen the relationships you have with your customer by being able to send them an email that is customized to them. Data that allows you to understand what products and services are the most popular in your business at what times of the day. Data you can use to build and customize your loyalty program to attract ideal clients.

These are all processes you have the opportunity to own but instead will opt to purchase them back from Square, the company you gave the data to in the first place.

One of the most important assets in the new economy is the relationship you have with your clients, what you know about them, and what you do with what you know about them.

If you’re using Square, they know more about your customers than you do, because they own the phone numbers, email addresses, and ultimately the payment data that your clients gave you when you swiveled the register around to pay for your services.

There’s a reason they won’t allow you to export your customer data to your own CRM, they’re not your customers according to Square. Whoever owns the data, and leverages it to create additional value for the consumer, wins. Unfortunately, it won’t be the business owner using the Square Register.

If you’re happy with the functionality you get with Square but you would like to grow your business by leveraging your client data in a more efficient way, feel free to reach out. We can introduce you to several tablet-based point-of-sale solutions that will allow you to utilize your customer data to grow your enterprise, while also keeping the functionality you’re accustomed to.