Square, the five-year-old payments startup founded by Twitter’s Jack Dorsey, is working its way through a challenging period: The company is reportedly up for sale, and its losses — estimated to be more than $100 million — continue to mount.
But corporate troubles have not stopped Square from continuing its product development. Today, the company announced three new products in its lineup of payment tools: an inventory tracker, an online payment system for in-store pickups, and an “offline mode” that allows retailers to take payments even when they aren’t connected to the Internet.
The announcements give the company more ways to siphon money from merchants. Square charges merchants 2.75% of every transaction made by swiping a credit card through its reader. However, with most of that money spent on fees to Visa (V), MasterCard (MA), and other financial intermediaries, Square’s challenge lies in finding larger merchants who are willing to subject themselves to a larger fee for the company’s seamless mobile payment experience.
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For now, the company continues to push out products. Square is best known for Square Register, the point-of-sale system that involves a rectangular reader plugged into a vendor’s phone or tablet. But it has more recently introduced an iPad point-of-sale system called Square Stand, an online marketplace called Square Market, a payment app called called Square Wallet that promises to remove the need to carry around cards, and a money transfer tool called Square Cash.
Square introduced Market, which the new in-store pickup tool uses to process online payments, about nine months ago. Ajit Varma, a director at Square and the lead on that product, said employees noticed that Square’s online customers were using Square Market to sell things locally, so the development team worked to make local pickup an option. The tool has been used by small businesses like Souvla Restaurant in San Francisco and Integral Cafe in New York, but more critically, it has also been used in major chains like Uniqlo and Whole Foods.
“We’ve been focused a lot on the pickup space and finding places that have never used it before,” Varma said. “A lot of companies have the resources to make custom systems, like for pizza ordering. We’re working with companies that are doing self-service for the first time.”
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Inventory tracking and offline mode also came from customer feedback and fit into Square’s greater goal to make the operations of its business customers more efficient. The inventory tracking tool notifies the business when supplies are running low, and the offline mode enables businesses to take payments in disagreeable conditions, such as during a power outage or in a location doesn’t have Wi-Fi access like a cab or outdoor event. When the retailer has restored his or her Internet connection, the transactions sync up and the payment is processed.
All of these services will share Square’s signature 2.75% fee, though Square plans on increasing the fee for its pickup service to 8% on July 1. For a company in pursuit of profit, it’s a hint of things to come.