Square's decision to scuttle its consumer-facing Order app shines an uncomfortable spotlight on the challenges inherent in creating technology that appeals to both consumers and merchants.

Square is a pioneer in mobile card acceptance and has inspired many imitators, but not all of its moves have been worthy of imitation. Despite Square's success with merchants, its consumer-facing apps have been short-lived or gone through multiple revisions. Square Order, which launched in May 2014, was the latest in a series of consumer-facing apps previously called Square Wallet, Card Case and Pay with Square.

"The issue we have seen thus far is it's very difficult to build a two-sided value proposition that can successfully serve both merchants and consumers at scale," said Jordan McKee, a senior analyst at 451 Research. 

"Order ahead" apps can't exist in a vacuum. They must have a clear connection to other services to be of value to consumers. Ideally, the payment function should be invisible; for example, Uber's popular ride-sharing service makes the payment practically invisible.

Square Order got this equation backwards. Its app included ancillary features such as menus, maps and lists of nearby merchants, but the focus was always on placing orders ahead of pickup. Square began notifying users on March 13 of the app's impending shutdown, according to multiple reports.

Square's next step will likely be built on the Caviar food delivery service, which Square acquired last year. Square's sellers were reporting low uptake for Square Order, according to a report from Re/Code. Square did not respond to a request for comment by deadline.

The challenge with consumer-facing mobile payment apps is making sure the function is not too narrow for the target audience. In Square's example, the company chose to split its offering into two separate apps — Square Order and Square Register — thus requiring Square's merchants to use a separate app if they wanted to use Square to purchase from other merchants.

The same dynamic recently played out with Amazon Local Register, a card reader launched by Amazon.com to compete with Square. At launch, many Amazon customers complained that Amazon forced them to create separate business account to accept payments; these users expected to use the same Amazon credentials they used when shopping.

"Tight integration is a critical success factor," McKee said.

The shuttering of Square Order is less of a failure and more a trimming of the fat, McKee said.

"Square's consumer-focused products are evaporating as the company pivots to a business-to-business company laser-focused on the small to medium business sector," McKee said. "With a business model built around razor slim margins and scale, Square needs to hone its focus on products such as Square Capital that generate higher returns. Consumer solutions like Square Wallet and Square Order have only served to bog the company down."

It's still a surprise to see Square back away from the "order ahead" market, said Richard Crone, a payments consultant.

"'Order ahead' is a hot market, the returns for those merchants who have deployed it have been phenomenal," Crone said, who said his consultancy counts about 50 providers in the mobile order space, adding the number of providers may be pressuring Square. "It's a very competitive market."

And Starbucks, a pioneer in mobile payments, is rapidly gearing up its own "order ahead" capability to complement its popular mobile payment app.

The success of Uber, which uses technology from Braintree, places pressure on other companies to make payment a natural part of the app's navigation, Crone said, adding that's not something that all providers can pull off.

"With Uber and Braintree, you order the car, you take the ride and you're done," Crone said, adding the only reason the rider would access the app again is to write a review of the driver—the payment happens in the background.

Square is capable of providing that type of experience, particularly since the restaurants are already using Square to accept payments and thus can accumulate a base of pre-registered users for seamless payments, Crone said, adding Square can still offer order-ahead capabilities to merchants through its application programming interface.

"It's hard to believe that they would get out of this segment this early in the game. It's a great segment for them to be in," Crone said. "But just because they are discontinuing Square Order doesn't mean they won't take part in this market."

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