by Mike Tuttle
Back in the old days, if you were a band or venue and wanted to be able to take credit cards, you had to get something called a merchant account. It was a huge pain, involved lots of fees and a machine of one kind or another that you had to pay rental on. Some accounts charged you a fee even when you did no business with them. So if your venue was seasonal, you still ended up paying fees and machine rental in downtime.
For bands this was all a big downer. As the world of money turned to plastic, sales were lost. Besides, it was always tough to fool with making change on cash sales and all the security issues that entailed.
Then came Square. It is almost too good to be true. You sign up to get a free card reader and verify your bank account information. When the reader arrives, you plug it into the earpiece/mic jack of your iOS or Android device and download a free app. After a couple of minutes of setup, you’re swiping cards and making money.
The possibilities for musicians and bands are staggering. Every band knows they lose sales due to not being able to take cards, and due to that limitation, many acts have a limited range of merchandise and other sellable products available. A solution like Square not only solves a current problem, but also opens up possibilities that bands may have not even thought of.
Founded by Jack Dorsey and Jim McKelvey, Square began in 2010 with an angel investment from a group of digerati and entrepreneurs, including Google’s Marissa Mayer and Kevin Rose, Twitter’s Biz Stone, Foursquare’s Dennis Crowley, and Shawn Fanning of Napster and Facebook, among others. There have been three other rounds of funding from capital groups. Square is currently valued at over a billion dollars.
If the app is free and the reader is free, how does Square make its money? They charge a 2.75% fee for every credit card transaction. The fee is a little bit higher than the rate old-school credit card processors charge, but the other costs like machine rental and fees often balance the whole thing out for small vendors. Square works with all major credit cards.
Using Square with a small iOS device as shown in the video above is one way to use the service. But there is also an iPad app called Square Register that works with the same card reader and is a full-featured customer-facing point of sale system into which merchants can load their merchandise items. It replaces a cash register. Customers can pay with credit card, with cash, or with their name.
Let’s back up there a moment – Pay with their name? This brings up another feature of Square called, simply “Pay With Square.” Customers can set up tabs and simply give their names to pay.
A solution like Square lowers the hurdles that people with great ideas and drive once had to vault just to start connecting with customers. For a band or management, the extra 20-25% boost in sales that is commonly reported can mean the difference between a successful gig or tour for small acts and having to hang it up.
We asked a few questions to Square’s Katie Baynes…
Square - Square makes it easier than ever for touring bands to sell merchandise on the road, especially since many bands previously only accepted cash – with Square they can plug the free device right into their iPhone and get paid the next day on sales they otherwise would have lost. Bands such as Fitz and the Tantrums, the Limousines, and the Silent Comedy love Square. We’ve also worked with The Dave Matthews Band Summer Caravan Tour, as well as music festivals such as Outside Lands and The Northwest Music festival.
SC - If a band were using Square to process payments for t-shirts, how quickly could each transaction go? Could they use multiple readers tied to one bank account?
Square - A Square transaction is incredibly fast. We’ve removed all of the added paper work and process to make a super efficient payment experience. Bands can either text, email or print the receipt for the customer.
Bands can link as many phones as they want to the same account – and we work on iOS devices as well as Android phones.
SC – What kinds of activities might someone use Square for other than outright point-of-purchase sales?
Buyers and sellers of all kinds use Square. Whether you’re selling a couch, splitting a dinner bill among friends, or running your entire business – Square makes it easier than ever to get paid. We have sellers of all kinds – freelancers, art galleries, restaurants, and even house call doctors. Square Register serves as a full point of sale system for businesses to accept payments, track inventory, and share menu and location information. Our latest product – Pay with Square is for consumers and is the most seamless way to pay, enabling individuals to pay with their name at their favorite local merchants, discover nearby businesses, explore menu listings and store receipts.
SC –
Square actually came to be because our co-founder Jim McKelvey, a glass blower from St. Louis had just lost a $2,000 sale and was lamenting on the phone with his friend Jack Dorsey about the problem. Jim lost the sale because he was unable to accept credit cards. While talking, Jim and Jack realized that they were speaking to each other thousands of miles away on what were essentially pocket sized computers. They wondered: why couldn’t their phones also accept credit cards? And so Square was born with the intent to help individuals and business owners never miss a sale again.
Square will be honored at the 2012 FlashFWD Awards for Best in Live on May 15. For more information on FlashFWD and to RSVP, click here.
Mike Tuttle is a freelance writer who digs on music, tech, and political topics that twitch his in-laws. Catch him on Google+ and Twitter at @MikeTuttle.
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