Nearly a year after making its mobile card reader available in Canada, Square Inc. has decided to locate a permanent office in the country.
The establishment of a Canadian office, planned for early next year, reinforces Square's claim in late April that its growth in Canada exceeded expectations. Square says its gross payment volume over its first six months in Canada was 90% higher per capita than the company's first six months in the U.S., where it is based.
Since then, Square has seen its momentum in Canada continue, says spokesperson Lindsay Wiese. Total activations in Canada are now five times what they were at the start of the year, Wiese says.
In addition, Square is on track to process $15 billion in transactions annually in the U.S. and Canada, Wiese says. Its gross payment volume in Canada increased three-fold during the second quarter of 2013, compared to the first quarter, she says.
The Canadian market represented Square's first move outside of the U.S. to offer its software and hardware. Square has also expanded into Japan.
Square moved into a new corporate headquarters in San Francisco last week, and also signed a lease for additional office space in the SoHo neighborhood of New York. Its first permanent Canadian office will be in Kitchener-Waterloo.
Square's worldwide headcount has doubled in the past year to 600 employees, it says. Its new San Francisco headquarters is 150,000 square feet, or three times the size of the company's previous space in the San Francisco Chronicle building.
Square's international expansion is happening faster than expected, says Gil Luria, analyst with Los Angeles-based Wedbush Securities. "That's an advantage of being a capital-venture based private company," he says.
Square also has offices in Atlanta and Tokyo. In Japan, Square is partnering with Sumitomo Mitsui Card Corp., which brought Visa products to Japan.
Because Canada's market is smaller than the U.S., Canada represents "an incremental move" for Square, but one based in sound strategy, Luria says.
"Square wants to get established in Canada before other products, especially PayPal Here, take hold there," Luria says. PayPal Here is PayPal's competing mobile card reader.
Square will likely be aided in its Canadian venture through its recent partnership with Intuit to integrate Square with Quickbooks software. However, Intuit's competing GoPayment reader is already available in Canada and can accept EMV-chip cards.
Square's reader currently does not accept EMV transactions, Wiese says, but Canadian EMV cards still have magnetic stripes.
Though she could not speak about any future plans, Wiese says Square's mindset "has always been that we will accept any form of payment that comes over the counter so the seller can always make a sale."
Payment devices constantly evolve and Square will make sure to support what people are using, Wiese adds.
"As we see adoption of new technologies, we will support those technologies," Wiese says.
Square has already adapted its card reader and mobile app to serve multiple new audiences. Its products include the Square Register and Square Wallet apps, Square Market website and Square Stand tablet case.