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Square pushes into consumer mobile payments with revamped app

Square, which is known for its mobile payments solution for merchants, is making a bigger push into the consumer side of the transaction with a major revamp of its application that lets shoppers complete transactions via their smartphones.

Card Case, Square’s cloud-based consumer mobile wallet app, is being renamed Pay with Square and now includes new features to make it easier for users to find nearby merchants who accept mobile payments via Square. The move puts PayPal and Square in direct competition with similarly positioned merchant and consumer mobile payments solutions.

“I think the rebranding makes sense,” said Drew Sievers, CEO of mFoundry, San Francisco. “Card Case was a bit of an odd name.

“I think the Square brand is powerful, even among consumers,” he said. “Pay With Square sounds exactly like what it is.

“While Square has done a masterful job of securing more than one million merchants, they have a lot of work to do in order to capture end users on Pay With Square.”

Consumer brands
The revamped Pay with Square app is also available on Android for the first time.

Pay with Square directs users to nearby participating merchants and lets registered users pay for purchases directly from the app once these merchants’ stores. PayPal’s app will offer similar functionality with a new release in May.

PayPal, which initiated a push into merchant solutions last year, brings some significant advantages on the consumer side, including a strong brand and a large customer base.

On the merchant side, Square is the first-mover and is reportedly processing $4 billion in transactions via its attachment for mobile devices enabling retailers to process debit and credit card transactions.

Earlier this month, PayPal introduced PayPal Here, a similar merchant solution for processing credit and debit card transactions via a mobile attachment.

“PayPal’s brand is powerful and a big asset for them as they move more aggressively into the merchant space,” Mr. Sievers said.

“The benefit for them is that, unlike Square, PayPal brings over 100 million end users immediately into the equation,” he said.

The revamped Pay with Square app includes an updated list of nearby stores, a search bar, a map view of nearby merchants and the ability to share information about merchants via email, Twitter and SMS.

In May, PayPal will release an updated mobile app for iPhone devices that will enable users to find nearby businesses that accept payments via the PayPal Here reader.

Registered users of both apps will be able to check-in a participating store when they walk inside, alerting the store to the fact that they are there and enabling users to pay for any purchases via the app.

The PayPal app will also integrate loyalty cards, coupons and gift cards. Square reportedly has similar functionality on the roadmap.

For either app, users need to register their credit and debit cards. PayPal users can also register their PayPal account to fund purchases.

The developments from both Square and PayPal come at a time that the mobile payments space is heating up.

ISIS, the mobile wallet from AT&T, Verizon and T-Mobile, is getting ready to launch in two test markets this summer while Google Wallet continues to add new merchants, most recently the frozen yogurt chain Pinkberry (see story).

Both of these solutions use near-field communications technology to enable tap-and-pay transactions inside stores while PayPal’s and Square’s solutions are cloud-based.

“Square is taking an ‘Apple-esque’ approach to this problem by controlling the entire stack: POS, user, credentials, etc,” Mr. Sievers said. “This is the best way to ensure a great user experience, which is what the industry needs in order to see real growth.

“The challenge is to convince users to sign onto the Square platform,” he said. “If they are successful with that, then Square will become a household name just like PayPal, Visa and MasterCard.”