Square Wallet: A Payment Method Doubles as Customer Retention Tool
/“Just bought my first items with Square's new payment app. I know it's just technology, but I'm lovestruck. Absolutely nothing passed between me and the person at the counter. Just an introduction, conversation, and somehow I had paid for my meal. No card, no cash, no ID. It's really an amazing product...”
It’s obviously an emotional reaction, especially so considering that all I had really done was to buy a mediocre cup of coffee.
I was excited to experiment, however, because we are on the cusp of notable fragmentation in the transaction services industry. In a field disrupted and then dominated for decades by credit cards, PayPal is now relatively known and established. On the up-and-coming list, we can add Google Wallet, Apple Passbook, ISIS, LevelUP, and Square.
Square is in for tough competition, but I think that they are going to go the distance. I predict this because I believe that fragmentation in this space will lead to payment methods becoming a point of individual and brand expression. In much the same way that Google+, Facebook, and LinkedIn are preferred in different scenarios, we will come to prefer specific payment methods for different scenarios and lifestyles.
I was excited to experiment, however, because we are on the cusp of notable fragmentation in the transaction services industry. In a field disrupted and then dominated for decades by credit cards, PayPal is now relatively known and established. On the up-and-coming list, we can add Google Wallet, Apple Passbook, ISIS, LevelUP, and Square.
Square is in for tough competition, but I think that they are going to go the distance. I predict this because I believe that fragmentation in this space will lead to payment methods becoming a point of individual and brand expression. In much the same way that Google+, Facebook, and LinkedIn are preferred in different scenarios, we will come to prefer specific payment methods for different scenarios and lifestyles.
For example: Filling up at a random gas station on the road? Google Wallet will be just fine, thanks. Buying a cappuccino from my local coffee shop for the 8th time this week? That’s when I want Square.
If you’re new to the product, Square is created by Twitter co-founder Jack Dorsey, and he has populated his team with many ex-Apple employees. The goal (very well documented in this interview) is a purposefully fundamental change in the way that transactions are conducted. Square achieves this when your phone signals to the person at the register that you are in the store. When you're ready to check out, that employee then physically recognizes you based on your profile picture before completing the transaction.
That one moment when the employee looks at you to confirm your face and name (not your credit card#, not your driver’s license…) creates a notably personal dynamic.
The hospitality industry has customer service in its DNA, and, as such, I believe that Square will be a big hit with high-end resorts and urban hotels. The same will go for personal service providers such as physical therapists, stylists, local businesses, and boutiques. Any business that has a high proportion of repeat customers should consider looking into Square.
Letting your clientele know that they can pay with Square sends the message that you are that kind of business. The type of business that really knows and values its customers as individuals, that puts the customer first, that takes pride in its services and its reputation.
Consumers will send a similar message when they pay with Square: "I want to be treated like a regular." "I want to have a dialog with you." "I’m here as much for your product as I am for the quality of the staff who provide it." What business owner would not want to attract that kind of customer?
While I am a big fan of the current suite of Google / Android services, I don’t believe that Google Wallet or ISIS will ever be a service like this. The other services will be great for high volume businesses and for acquisition business. But, once you have them on the hook, Square will be an excellent retention tool.
Have you had the chance to use the Square App yet? What are your thoughts on how it will (or will not) affect the business/customer relationship?