Who will benefit from Apple's Square Stand sales?

Square Inc. and Apple Inc. teamed up again for a new POS product partnership. On July 9, 2013, Square released the Square Stand, a POS device designed to enable brick-and-mortar businesses to use an iPad as a free-standing, over-the-counter, card-swipe sales system. Apple agreed to showcase and sell the product in Apple Stores across the United States. It is one of two companies designated as primary consumer retail outlets; the other is Best Buy Inc. The device can also be purchased through Square at squareup.com/stand.

The arrangement follows a successful pairing by Square and Apple in 2010, when Apple was given rights to distribute the Square Register app, which allows individuals and merchants in the United States and Canada to process card-based transactions on Apple iOS or Android smartphones or tablet devices. The app supports manually entered transactions or cards swiped via the 1-inch Square card reader.

A front runner in the mobile commerce wave, Square released the Register product and free reader device at a time when few other smartphone swipe devices were available. Square's simple POS system and straightforward transaction fee model caught on quickly with micro-business owners across North America.

Soon after Square's initial launch, the demand for stand-alone, over-the-counter tablet solutions began to swell within the small to midsize retail business (SMB) sector. In response, several third-party stand devices were introduced into the retail market, giving merchants the ability to mount a POS enabled tablet more permanently on the sales counter to create a more traditional cash register-like system.

Square takes stand in SMB market

Taking the idea a step further, Square created a device that combines the functionality of its reader device into a tablet stand that serves as a fully integrated cash register solution. The system uses a built-in card reader in the front of the stand unit and also connects to third-party accessories, such as a receipt printer, cash drawer and bar code scanner.

The Square Stand processes card-based transactions, using the same Square Register app the Square mobile card reader uses, as well as Square Wallet mobile transactions. The Square Stand is currently only compatible with an iPad 2 or 3, but a more diversified tablet version is expected to be released later in 2013.

The newly released Square Stand product and the continued partnership between Apple and Square are influencing the POS revolution occurring worldwide. According to Todd Ablowitz, President of the payments industry consultancy Double Diamond Group, the introduction of Square Stand is "yet another example of how they are moving up market from micro-merchants to small and medium-sized businesses by offering an affordable, simple and feature rich cloud-based POS system. This is a natural evolution for a disruptive technology player like Square, and it poses challenges for acquirers because small and medium-sized merchants are the sweet spot of profitability for acquirers."

Ablowitz added a few words of wisdom for ISOs and acquirers who are, "still lugging around terminals and selling merchants on rate." He suggested they "start looking for a new job." As industry experts have stated before, it is the superior knowledge and service ISOs and merchant level salespeople can bring to merchants that will continue to set them apart.

Editor's Note:

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