Square Inc. spent six weeks in Portland, Ore. — a city with a strong existing base of micro-merchants — to transform it into one of the company's top U.S. markets in total Apple Pay transactions conducted with its card readers.
Such results could help reassure Square that it's on the right track in taking a local approach to drive sales of its newest card reader, a $49 plug-in device that supports EMV and contactless mobile wallets including Apple Pay, Samsung Pay and Android Pay.
Square got its start in 2010 by giving away its card readers for free, but now it's asking merchants to pay for its newest hardware, a strategy that could generate much-needed revenue at the risk of alienating merchants accustomed to receiving the hardware gratis.
To showcase the appeal of mobile payments among younger, more active consumers, Square also signed up to be the exclusive payments provider at the
Portland is Square's first-ever local marketing push, where it promoted its devices with local advertising and discounts at certain Square merchants.
The choice of Portland wasn’t surprising to many observers, because the city has a vibrant arts scene and boasts the nation’s longest-running continuously operated outdoor arts-and-crafts event, called Saturday Market, which opened in the city’s downtown area 42 years ago.
A Square spokesperson said the company is planning another local marketing push soon, but it hasn’t disclosed the location.
Local marketing campaigns make a lot of sense for Square at this point, experts say.
“Particularly where there’s a high concentration of small sellers, such as arts and craft fairs, food truck festivals, music festivals and downtown areas with a lot of small businesses, Square can get a lot of return on its marketing investment,” said Rick Oglesby, research director with Double Diamond Group.
What remains to be seen is whether highlighting mobile wallet acceptance will help Square gain an edge over rivals such as First Data Corp., Poynt and other mobile point of sale vendors that support both EMV and mobile wallets.
“Square believes it has a compelling product for merchants to accept mobile wallets, and its merchants will benefit from that, so they’re using that in their marketing and to try to gain a competitive advantage,” Oglesby said.
A craft-brew purveyor, a cupcake maker, a local coffee store and two cafes were among Portland businesses accepting Square that saw the most mobile wallet transactions during the local marketing campaign, which ended in June, Square said.
Food and beverages were the most common purchases Portland consumers made with a mobile wallet using Square, and lattes were the most popular coffee choice for those paying with a mobile wallet, Square said.
Consumers paying with a mobile wallet also left a tip more often than those paying with a card, Square’s data suggests. Among Square’s users who paid with a mobile wallet during the local marketing push, 73% left a tip, compared with 71% who left a tip when using an EMV-enabled chip card and 67% who left a tip when paying with a magnetic-stripe card.
In addition to events, Square called attention to its hardware this year by introducing
Square still offers a free, no-frills magnetic stripe-only card reader, along with the $99 Square Stand, which can be bundled with business services for $177.
To cut through the clutter of its own offerings, this week Square released a
