Even though Square has put a lot of effort into enabling its merchants to accept chip and contactless card transactions through an EMV reader the past two years, the company's interest in speed and ease for clients keeps it focused on mobile payment technology.
"While we've done a lot of amazing work to get EMV transaction times down from an industry average of 11 seconds to under 5 or 4 seconds, we think we can go much farther," Square CEO Jack Dorsey said Nov. 1 during the company's third-quarter earnings conference call.
Those faster EMV transaction times occur through Square's new EMV and Near Field Communication (NFC) reader to accept contactless cards and mobile payments, which it is selling for $49. To go further, Square has to encourage the use of those NFC readers in allowing consumers to pay with their phones, Dorsey said.
"NFC is even faster," Dorsey added. "So, paying with your phone through Apple Pay or Android Pay is something that we want to enable all of our sellers to do and therefore enable all buyers to do."
In addition to being a faster payment method, NFC mobile payments "continue to help reduce the risk and cost in the system, as well," Dorsey said. "So that's been our approach."
Dorsey has made it clear in the past that the development of the EMV/NFC reader for Square merchants accepting payments through their mobile phones would not result in the company bringing back its own Square Wallet.
Instead, Square has focused on its software and hardware sales as a payment processor and opened its arms to assuring its merchants can accept the various mobile wallet options that customers might use to initiate a transaction.That resulted in a solid quarter for Square, reporting $8.2 million in hardware revenue, representing a 94% increase over a year ago. The company's software and data business netted $35.3 million in revenue, which topped projections by more than $3 million.
Square has been pushing EMV and NFC payments because they are more secure for merchants and their customers, as well as the sellers of Square products, Sarah Friar, chief financial officer said. The company's most flexible solution for merchants is the Square Stand that accepts both magstripe transactions and utilizes Bluetooth technology to accept EMV and NFC transactions, Friar said.
"But we are always looking for opportunities to remove more friction," she added. "At the same time, we want to take a very strong point of view that as an industry we need to move more and more people away from magstripe and more into these authenticated electronic payments."
Square will continue to focus on its U.S. market, but has expanded into Canada, Japan and Australia, a market in which the NFC reader was a key because 70% of transactions in Australia are NFC, Dorsey said.
"The important thing about that chip and contactless reader is that it's a global standard and global product for us," he added. "That gives us freedom to move anywhere that we want in any market we want to."
In that regard, the company's recent moves in establishing a presence in the U.K. indicate Square is ready to take on some of the more established mobile card-reader companies that call Europe their market turf.