Firefly customer Kassondra Sheppard uses Square. By Georgia Perry
“I shouldn’t be doing this.”
“It’s all I have.”
The all-too-familiar refrains of the regular credit card user may soon be put to rest thanks to an entirely different plastic invention, a little white square about the size of a thumbnail.
In general, smaller establishments prefer cash transactions because they cost the businesses nothing, while each credit card swipe costs businesses a certain percentage on top of the monthly fee they pay just to have the ability to read cards with what is called a merchant account. The thinking is that if you’re really supporting small business, you’re not paying with a card. Problem is—who carries cash these days?
Caitlin Parker, co-owner of Firefly Coffeehouse, reassures sheepish card users who approach her counter, tails between their legs: “I tell them, ‘swipe it.’” The Firefly uses Square, which charges a flat 2.75 percent for every swipe and no monthly fees. Parker says she’s never lost more than $3 a day on it. She speculates that getting Square last July has increased her sales by 5-10 percent, as the Firefly was cash-only for four years before Square.
“Once we got Square I had so many customers come into the shop and say, ‘I’m going to come in here every day now.’ Before they would come only once every two weeks because they didn’t carry cash.”
According to Square communications associate Lindsay Wiese, Santa Cruz boasts “one of the highest concentrations of use” in the U.S., with more than 1,000 local businesses and individuals using Square. Wiese said Santa Cruz is on a list of Square’s “top 20 cities” in terms of activations by population, and compared it to other artsy, eclectic cities such as San Francisco, Portland and Austin. Wiese declined to provide the full list, but The Pacific Coast Business Times reported that Santa Barbara’s on it too, with 1,500 users.
Created by Twitter co-founder Jack Dorsey in 2009, Square has 1 million users and processes $5 billion payments a year. The plastic bit plugs into iPhone, iPad, iPod Touch and Android devices and easily syncs up with Square’s payment processing application. Its allure comes from its low cost and simplicity compared to traditional merchant accounts, whose salespeople, like a Randall I spoke to from BluePay, say confounding things like this: “A service like Square, their rates are pretty straightforward. That’s not how we do business.”
“You have enough to worry about when you’re opening up a shop. It’s nice to have one thing that’s easy,” says Jeremy Lampel, co-owner of Companion Bakeshop and a Square user.
But is Square a little too simple? To attract customers Square uses an aggressive social media presence, a microwave-quick sign-up process and a clean, easy-to-navigate website that seems to be both working for and against them. Square’s Facebook page, which urges entrepreneurs to wax poetic about their passions, also hosts numerous pleas from consumers to respond to emails and provide somewhere, somehow, for the love of God, a phone number—noticeably absent on the company’s sleek web page.
Parker has the number, which she says she uses “just to call them and tell them I love them,” but only because she saved it once when they called her in response to an email. She eyes me conspiratorially. “Do you want it?”
Cliff Hodges, owner of Adventure Out, takes his Square reader into the woods on the company’s outdoor survival classes to upsell items such as knives and clothing. He also maintains regular merchant accounts for Adventure Out and his other business, Cross Fit West, in addition to his Square, which he says is “a little cheaper than a traditional merchant account, but not really.” His merchant accounts give him options for accepting online registration payments as well as monthly billing for Cross Fit West members, procedures for which Square doesn’t have options.
“When you give people more ways to spend money, they spend more money,” he says matter-of-factly. “It’s not about saving money. It’s about making more money.”
While Lampel uses Square at Companion’s storefront, he still uses cash at the farmers’ markets. Nesh Dhillon, Executive Director of Santa Cruz Community Farmers Markets, says he’s looking into different options for accepting plastic at the markets but doesn’t think he’s losing business by being cash only. “We haven’t reached a tipping point yet with that sort of thing. It’s such a cash business.”
Wiese insists, “Square is for everyone.”
Fair enough. But what happens deep in the wilderness on an Adventure Out outing when Square, which depends on a cell phone connection, loses signal?
Hodges laughs. What else? “We take cash.”