“With losses widening and cash shrinking, representatives of mobile-payments startup Square Inc. have discussed a possible sale to several deeper-pocketed rivals, according to people familiar with the matter,” Alistair Barr, Douglas Macmillan and Evelyn M. Rusli report for The Wall Street Journal.
“Google Inc. discussed a possible acquisition of Square earlier this year, according to three people familiar with the matter. Those talks followed a meeting in 2012 between top Google and Square executives to discuss a possible takeover, according to two people familiar with the matter. It isn’t clear whether the talks are continuing,” Barr, Macmillan and Rusli report. “Square also had informal discussions about a deal with Apple Inc. and eBay Inc.’s PayPal in the past, according to people familiar with those situations. Those conversations never developed into serious talks.”
“Square recorded a loss of roughly $100 million in 2013, broader than its loss in 2012, according to two people familiar with the matter,” Barr, Macmillan and Rusli report. “A spokesman for Square said, ‘We are not, nor have we ever been in acquisition talks with Google.’ He added, “While we appreciate that Square may be an attractive target for some companies, we have never seriously considered selling to anyone or been in any talks to do so.'”
Much more in the full article here.
Apple already has a mobile payment system, don’t think Square brings anything to the table that Apple needs.
but they sell those devices you attach to your iPhone or iPad to swipe your credit card. plus they must get a percentage of the transaction. Apple doesn’t own those or the patents i’m assuming.
if anyone offers lots of money for this company they should take it. I’m surprised paypal hasn’t already destroyed them
Actually, they give the readers away. They take a 2-3% transaction fee, depending on some exact details that I don’t recall off the top of my head. It should be a money maker, I would think. A great alternative to being ripped off by a bank with high cost readers, service fees and transaction costs.
They also have a (currently) free cash transfer protocol that I don’t know how they would ever monetize. I’ve used it a couple of times and it is really pretty smooth. I guess I might be willing to pay a small fee for the convenience, but many would not.
I could see Square as part of Apple, good design and user-friendliness being part of Squares appeal. I could see eBay/PayPal wanting to buy them, since PayPal thought enough of them to copy their reader concept. Acquisition by Google would be end-of-life for Square, at least for me.
Apple is perfectly capable of making a card reader if they wanted to. My guess (if they went down the mobile payment route) is that they would do it without the card at all, just build it all into the phone as it’s done for iTunes/App store now.
I like Square, I just don’t see it as anything other than a bug for Apple to squish if it ever decides to go into mobile payments.
I have been watching Square for some time. Their current business model works only for very small businesses. The reason is that their POS system is simplistic and their 2.75% charge is high. For example, one of the businesses I own averages less than 2.50% credit card charge cost.
Somehow it’s working for Starbucks and Whole Foods. Keep in mind that 2.75% is without any additional fees.
My guess is that they’re building a base of small businesses now, but will scale up with tiered fee levels.
Square’s main appeal was for independent enterpreneurs. Their free hardware (Square mobile credit card reader) and their Point-of-Sale (POS) software, together with the merchant services, allowed anyone and everyone with a US-based bank account to accept credit card payments for goods and services. You could do a yard sale and take credit cards; rock bands could accept credit cards for CD sales at their concerts; escort girls could accept credit card payments for their “services”…
Their service is extremely easy to set up, inexpensive (no up-front or maintenance cost, just the per-transaction fee and percentage; if you don’t use it, you pay nothing), anyone can set it up for the heck of it, and get a free card reader from them. If they are losing money, perhaps their fee structure isn’t adequate to support the business. Then again, it isn’t any worse than PayPal, TicketLeap, EventBrite or other similar services out there.
Square’s interface is designed very well. It looks appealing for customers, as well as for the merchants, and it would be a shame if it failed.
There is a certain segment of startups that want all the cash customers they can get for the obvious reason.
Maybe that segment is larger than we think. Hey, maybe the BLM swat team will be moved to the IRS?
it may or may not make sense for Apple to buy square as part of a push into small retail businesses, but I’ve been saying for some time that Apple should own a bank. Not to be in the consumer retail banking business of running checking and savings accounts, but to be able to do ordinary bank-to-bank transactions for things like iTunes and Apple retail purchases.
-jcr
Even though Square denies that they are in buyout talks with anyone, the handwriting is on the wall – the transition in the USA from magstripe cards to smart cards, which will be well underway by this time next year (American Express is already doing it) and complete by 2016, will render 100% of the existing Square readers obsolete. I don’t see them being able to freely distribute the (far more complicated) smartcard readers and still stay in business.