Addressing the desire of small merchants that want a straightforward way to sell online, Square and Ecwid are partnering to synchronize sales and inventory between the physical and digital worlds.

San Diego-based online tools provider Ecwid brings flexibility to Square merchants by embedding its software on the merchant's social media page, such as Facebook or Tumblr, or a WordPress page or website. It also allows merchants to have Ecwid's cloud-based online store configuration on multiple sites simultaneously.

Any Ecwid user now has the ability to select Square as a payment gateway, which is a vital new offering, said Ecwid president Jim O'Hara. "We have some small merchants come to Ecwid who don't really know what a payment gateway is," O’Hara said.

Ecwid brings more than 900,000 registered merchants in 75 countries, with support for 45 languages. Other payment providers have aligned themselves with Ecwid the past two years, including Stripe in early 2014. Ecwid also works with PayPal and American Express.

The rising importance of offline-to-online capabilities provided the incentive for Square to move in that direction earlier this year in a separate partnership with Bigcommerce, while adding inventory management for physical and online stores just three weeks ago.  

With the Ecwid agreement, which includes a partnership in sales efforts and revenue sharing, Square has its smaller and micro merchants in mind.

"We've had hundreds of downloads of Ecwid from the tests with Square," O'Hara said.

In light of its recent IPO application and a revelation that its processing deal with Starbucks was losing it money, Square continues to concentrate on providing more revenue-generating tools to its small-merchant base, said Marc Cochrane, and independent senior advisor and payments consultant.

"Whether or not this partnership drives incremental revenue... the more of a menu for small merchants you provide, the better a payment processor you will be," Cochrane said.

The partnership also makes sense as an enhancement to Square's distribution model for small merchants, Cochrane added.

That distribution can trickle down to the smallest of merchants, even those who use Square card readers or the online Square Marketplace but don't operate a physical store.

"Those types of people can now sell online or offline and keep track of it in real time," O'Hara said. It is also possible for nonprofit organizations to use Square for payment acceptance and Ecwid to set up an e-commerce presence for accepting donations or purchasing auction items for a single event or a single day, O'Hara added.

One of the biggest trends in retail is that the larger brick-and-mortar retailers are getting better at selling online from the same inventory, said Gil Luria, analyst with Los Angeles-based Wedbush Securities.

While offline-to-online capabilities are generally considered an advantage of larger retailers, Ecwid and Square are providing their services to allow small merchants to do the same thing, Luria said.

"Square wants to give its customer base, almost entirely small businesses, the tools they need to compete with the larger retailers," Luria said. "Square needs to help their customers in any way they can, and if they do, they will continue to see the nice growth rate they have had."

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