Digital Transactions Authoritative, insightful and timely information for payments professionals
Payments observers have known for some time that not all companies introducing mobile wallets have met with success, but now Square Inc. has had to shutter a product that succeeded a failed wallet.
The San Francisco-based company on Friday began notifying users of its Square Order app that the product is no long available for download and that orders will no longer be accepted on it as of March 20. The move comes just 10 months after Square rolled out Order as its replacement for Square Wallet.
The company has released a statement on the decision to close Order indicating it is “focusing” on other tools for small businesses, including gift cards and its Caviar service, as well as online ordering. Square acquired Caviar, which lets restaurants outsource local delivery, in August.
Square says Order users can still place pick-up orders with businesses using their Square Online Store. Square has a service called Pickup, which works with a business’s site to allow consumers to place orders for pickup later.
Square Order allowed users to place an order and pay for it on a mobile device, then show up later at the business—usually a coffee shop or café—to pick it up. Usage was hampered, however, by the fact that the service was available only in coffee shops in New York and San Francisco.
Also, in July, Square began levying an 8% fee for Order transactions, which may have been in line with other order-ahead apps but was well above typical card-acceptance pricing, including Square’s own 2.75% rate. It was not immediately clear Monday whether that pricing for Order was still in effect at the time Square decided to discontinue the app. A Square spokesperson contacted by Digital Transactions News would not comment on matters beyond the statement.
Square’s readiness to shut down Order so soon after its introduction surprised some observers. “It does seem premature,” Nick Holland, who follows mobile payments as a senior analyst at Javelin Strategy & Research, Pleasanton, Calif., says in an email. “I'd have thought that Square would want to be diversifying their initiatives, particularly with the model of handing out free card readers being no longer viable with EMV [chip cards] coming. A year hardly seems long enough to gain traction for any new payment platform.”
Square has distributed about 5 million of its iconic mag-stripe-reading dongles to small businesses, and announced an EMV reader last summer. While the mag-stripe dongle is free if ordered directly from Square, the company is taking pre-orders of the EMV device at $29 each.
