Square Contactless and Chip Card Reader
The move is an important one for Square, which went public last week. The firm needs to show Wall Street the ability to grow revenues, and it also needs to prove it can remain relevant as mobile payment platforms like Apple Pay increase in popularity. Square also needs to deliver an Apple Pay solution to merchants hungry to attract Apple's lucrative customers.
A Square Apple Pay solution is also important to Apple. Many large retailers have been quick to jump on the Apple Pay bandwagon, but those companies are better able to afford the infrastructure necessary for NFC transactions. Small merchants, especially the independent merchants that gravitate to Square to handle their credit card transactions, can't do it on their own.
Square specified that some of these first 100 readers were rolled out to Honey Butter Fried Chicken in Chicago, Philz Coffee in San Francisco, Sump Coffee in St. Louis, Cafe Grumpy in New York City, and “all 20-plus merchants in the Urbanspace Vanderbilt food hall in New York.”
Other cities include Atlanta, Austin, Boston, Denver, Los Angeles, Nashville, New Orleans, Miami, Minneapolis, Philadelphia, Phoenix, Sacramento, Santa Cruz, Seattle, Tampa, and Washington, D.C.
In addition to taking Apple Pay over NFC, the new readers also accept chip cards, which allow transactions without using the magnetic stripe on the back of most cards. Banks are busily moving their credit card users to chip cards, making these readers doubly important to retailers.
The question is how long will it take Square to roll more readers out to more stores. 100 merchants is a drop in the Square bucket.