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I said for months and years that Square was absolutely myopic and slow-moving when it came to online transactions and developing and releasing an API (which sti

I said for months and years that Square was absolutely myopic and slow-moving when it came to online transactions and developing and releasing an API (which still does NOT exist). Stripe came in and absolutely crushed them. Square deserves it. They had huge first-mover advantage and massive popularity early. I will do mid six figures through Stripe in the next 12 months and all of it - 100% of it - could have gone through Square had they simply spent a few weeks exposing and documenting an API. Embarrassing.

deleted 13y ago
[deleted]
dlevine 13y ago
Square's primary problem is not the lack of an API. Square's problem is that the margin on processing physical credit cards is razor thin, especially if you are just using other people's networks. My thought has been that Square will eventually launch its own credit card network once they have a large enough share of the credit card processing market. Square could have launched an API and done what Stripe did, but the problem of processing credit cards over the Internet are different from the problem of processing physical credit cards. I don't think that anyone could have simultaneously succeeded at both.
- icelancer 13y ago
  They already process cards over the Internet with Square Marketplace. They clearly were interested in entering this area, but fell years behind everyone else despite having years+ first mover advantage.
  - sinzone 13y ago
    Shopify won the marketplace part, and also launched POS, which is a direct competitor of Square. http://www.shopify.com/pos http://www.shopify.com/pos
  - whbk 13y ago
    I remember emailing Tristan O'Tierney back in 2012 asking about an API after having seen that they had allowed a small beta group access to an API [0,1]. His response was just that they'd decided against moving forward with it -- not sure of the specifics but they had at least gotten that ball rolling at one point before deciding to focus on other things, would be interesting to hear more about that decision. [0] https://groups.google.com/forum/#!topic/square-client-api/c0rdiYryXJk https://groups.google.com/forum/#!topic/square-client-api/c0... [1] https://groups.google.com/forum/#!topic/square-client-api/7xFFwUotJNY https://groups.google.com/forum/#!topic/square-client-api/7x...
- rahimnathwani 13y ago
  You'd have to have a really large part of the acquiring market, if you hope to get consumers to use your new card brand. The idea of Square doing tang seems similar to the idea of imo.im getting people to use their own IM network in preference to the popular third party ones they already support. It might be doable but there would need to be a hook for cardholders, like cash back, loyalty points, analytics etc.
abalone 13y ago
How exactly do you know Stripe is crushing it?
- nathancahill 13y ago
  "Stripe Raises $80M ... At A $1.75B Valuation" [0]. I think it's safe to say they are crushing it. [0] http://techcrunch.com/2014/01/22/with-an-eye-to-international-growth-payments-company-stripe-raises-80m-from-peter-thiel-khosla-and-sequoia-at-a-1-25b-valuation/ http://techcrunch.com/2014/01/22/with-an-eye-to-internationa...
  - untog 13y ago
    Valuations do not mean you are "crushing it", or that "crushing it" will mean anything in three month's time. Take a look at Zynga for an example.
    - nathancahill 13y ago
      Eh, these are people that had a look at Stripe's financials and decided to invest in it at that valuation. I'm not going to speculate on their actual numbers, but I trust that Sequoia and co have a good idea what they're doing.
      - visnup 13y ago
        https://connect.squareup.com/docs/api https://connect.squareup.com/docs/api
  - abalone 13y ago
    And Square's valued at 3 times that. Yet this story is all about how the actual performance is rougher. So I ask again, how do we know Stripe is actually crushing it? (Also why does a question like that get down voted?) http://techcrunch.com/2014/01/13/putting-squares-5b-valuation-into-context/ http://techcrunch.com/2014/01/13/putting-squares-5b-valuatio...
flurdy 13y ago
Stripe did not crush Square. Their core products are not competing in the exact same market. Stripe core is online processing of payments and Square is physical POS for everyone. There might be some overlap in the processing but that is not Square's core product and main selling point.
objclxt 13y ago
I think Square and Stripe can easily co-exist - the more pressing issue, as far as I can see it, is Square's model won't scale very well at all to EMV ('chip and PIN') cards, which severely limits their market. Square's current magstripe reader is very simple, and thus cheap to produce to the point where they can give it away. EMV readers are not cheap. They must be certified, and are far more complex. I was in an Apple Store in London a few days ago and they were selling PayPal branded EMV readers for about $150. Even if we assume a very healthy markup on that price, given the margins Square is on they cannot afford to give away a reader that would cost them ~$50 to produce. It changes their entire business model. Square have offered no indication of how they plan to support EMV cards once they become widespread in the US (which will eventually happen), other than 'you can still swipe the magstripe', which whilst true also usually means the fraud liability remains with the retailer, rather than the bank.
- danpalmer 13y ago
  I saw this limitation with EMV a few years ago, it concerned me that they wouldn't be able to move into EMV markets quick enough, and we already have PayPal, iZettle and a few other smaller companies in the UK and Europe supporting EMV cards. However, I then spoke to an ex-Square employee, one of the very early members of the team, and he told me that they weren't concerned at all about it, they had much bigger plans. I was skeptical, but I think Square Cash might be one of the elements of this bigger plan.
rafekett 13y ago
Stripe and Square don't remotely compete. Stripe is in a low-volume, high-margin world (flat fees), which is the opposite of Square's situation.

deleted 13y ago

[deleted]

dlevine 13y ago

Square's primary problem is not the lack of an API. Square's problem is that the margin on processing physical credit cards is razor thin, especially if you are just using other people's networks. My thought has been that Square will eventually launch its own credit card network once they have a large enough share of the credit card processing market. Square could have launched an API and done what Stripe did, but the problem of processing credit cards over the Internet are different from the problem of processing physical credit cards. I don't think that anyone could have simultaneously succeeded at both.

icelancer 13y ago
They already process cards over the Internet with Square Marketplace. They clearly were interested in entering this area, but fell years behind everyone else despite having years+ first mover advantage.
- sinzone 13y ago
  Shopify won the marketplace part, and also launched POS, which is a direct competitor of Square. http://www.shopify.com/pos http://www.shopify.com/pos
- whbk 13y ago
  I remember emailing Tristan O'Tierney back in 2012 asking about an API after having seen that they had allowed a small beta group access to an API [0,1]. His response was just that they'd decided against moving forward with it -- not sure of the specifics but they had at least gotten that ball rolling at one point before deciding to focus on other things, would be interesting to hear more about that decision. [0] https://groups.google.com/forum/#!topic/square-client-api/c0rdiYryXJk https://groups.google.com/forum/#!topic/square-client-api/c0... [1] https://groups.google.com/forum/#!topic/square-client-api/7xFFwUotJNY https://groups.google.com/forum/#!topic/square-client-api/7x...
rahimnathwani 13y ago
You'd have to have a really large part of the acquiring market, if you hope to get consumers to use your new card brand. The idea of Square doing tang seems similar to the idea of imo.im getting people to use their own IM network in preference to the popular third party ones they already support. It might be doable but there would need to be a hook for cardholders, like cash back, loyalty points, analytics etc.

abalone 13y ago

How exactly do you know Stripe is crushing it?

nathancahill 13y ago
"Stripe Raises $80M ... At A $1.75B Valuation" [0]. I think it's safe to say they are crushing it. [0] http://techcrunch.com/2014/01/22/with-an-eye-to-international-growth-payments-company-stripe-raises-80m-from-peter-thiel-khosla-and-sequoia-at-a-1-25b-valuation/ http://techcrunch.com/2014/01/22/with-an-eye-to-internationa...
- untog 13y ago
  Valuations do not mean you are "crushing it", or that "crushing it" will mean anything in three month's time. Take a look at Zynga for an example.
  - nathancahill 13y ago
    Eh, these are people that had a look at Stripe's financials and decided to invest in it at that valuation. I'm not going to speculate on their actual numbers, but I trust that Sequoia and co have a good idea what they're doing.
    - visnup 13y ago
      https://connect.squareup.com/docs/api https://connect.squareup.com/docs/api
- abalone 13y ago
  And Square's valued at 3 times that. Yet this story is all about how the actual performance is rougher. So I ask again, how do we know Stripe is actually crushing it? (Also why does a question like that get down voted?) http://techcrunch.com/2014/01/13/putting-squares-5b-valuation-into-context/ http://techcrunch.com/2014/01/13/putting-squares-5b-valuatio...

flurdy 13y ago

Stripe did not crush Square. Their core products are not competing in the exact same market. Stripe core is online processing of payments and Square is physical POS for everyone. There might be some overlap in the processing but that is not Square's core product and main selling point.

objclxt 13y ago

I think Square and Stripe can easily co-exist - the more pressing issue, as far as I can see it, is Square's model won't scale very well at all to EMV ('chip and PIN') cards, which severely limits their market. Square's current magstripe reader is very simple, and thus cheap to produce to the point where they can give it away. EMV readers are not cheap. They must be certified, and are far more complex. I was in an Apple Store in London a few days ago and they were selling PayPal branded EMV readers for about $150. Even if we assume a very healthy markup on that price, given the margins Square is on they cannot afford to give away a reader that would cost them ~$50 to produce. It changes their entire business model. Square have offered no indication of how they plan to support EMV cards once they become widespread in the US (which will eventually happen), other than 'you can still swipe the magstripe', which whilst true also usually means the fraud liability remains with the retailer, rather than the bank.

danpalmer 13y ago
I saw this limitation with EMV a few years ago, it concerned me that they wouldn't be able to move into EMV markets quick enough, and we already have PayPal, iZettle and a few other smaller companies in the UK and Europe supporting EMV cards. However, I then spoke to an ex-Square employee, one of the very early members of the team, and he told me that they weren't concerned at all about it, they had much bigger plans. I was skeptical, but I think Square Cash might be one of the elements of this bigger plan.

rafekett 13y ago

Stripe and Square don't remotely compete. Stripe is in a low-volume, high-margin world (flat fees), which is the opposite of Square's situation.