Dive Brief:
- Square expanded its hardware offerings with the introduction yesterday of Square Terminal, which is designed to replace legacy, keypad credit card machines, according to a press release.
- Square Terminal is an all-in-one mobile hardware device that does not require a phone or tablet unlike the company's basic card reader, Square's head of hardware Jesse Dorogusker told TechCrunch. It accepts mobile payments, as well as chip or swipe payment cards, and has a built-in printer, along with an array of extra-cost accessories such as a countertop mount, a belt clip and a cash drawer.
- Affordability is one of Square's main pitches for the device, which costs $399 but comes with a $300 processing credit for sellers making the switch to Square and is less expensive than the Square Resister device. Processing fees follow the same simple flat rate structure Square is known for: 2.6%, plus 10 cents for each transaction, per the release. Processing time for chip cards is two seconds, according to TechCrunch.
Dive Insight:
Payments technology is getting more sophisticated to cope with the multiple payment options consumers are embracing and the competition from the "Just Walk Out Shopping" experience presented by Amazon Go and others following Amazon's lead. Hardware is also getting smaller, more compact and simpler to use in locations all over the store, and not just the front counter or checkout.
POS systems are projected to grow strongly in the coming five years, according to a recent Juniper Research study. Smart checkout technology systems are expected to process more than $45 billion in transactions for retailers by 2023. That translates to a 182.2% compound annual growth rate between now — with smart checkout transactions are estimated to total $253 million — and 2023. Juniper said it could take until 2021 before at least 2,000 stores have smart checkout technology.
In an indication of how much these payments systems are rising in importance, Square this month announced a new offering called Square Installments, which allows merchants the ability to set up installment payment programs for their customers following a quick application process online or in-store. To facilitate scan-and-go shopping offerings, Zebra Technologies just announced the PS20, a new Android-based mobile barcode scanner that can be used by shoppers and store associates to scan and pay for items without going through a traditional checkout line. Men's apparel retailer Untuckit has added mobile transactions as part of a partnership with Studio Proper to streamline POS in its stores. Meanwhile, Walmart abandoned a scan-and-go roll-out and instead is equipping store associates with POS devices that can checkout customers and provide a receipt away from the front registers, similar to what Square's new tech is doing.
Square's new device is another step forward for payments, putting full point-of-sale capability into a small device that can be handheld or counter mounted. Previous card readers from Square depended on other mobile devices, such as smartphones or tablets, for their intelligence, while the bigger POS products were not portable. Square Terminal is the best of both worlds, incorporating a card reader, contactless connectivity for mobile payments, a printer and a 5.5-inch color screen that can show a calculator, a cash register display or a list of available products.
With those features, it has the potential to further reduce friction at the checkout and enhance the customer experience many retailers are trying to project.
