Square has taken its biggest shot yet at traditional payment terminal manufacturers with Square Stand, a new card reader built to house an iPad that can be used in place of a stationary point of sale terminal.
Square revealed the Square Stand during a May 14 event at Blue Bottle Coffee in San Francisco, noting that Blue Bottle will be among several merchants across the U.S. using the new stand. Most of the other Square Stand users will also be coffee, pastry or sandwich shops.
The new hardware positions Square to approach larger restaurants and retailers. Square CEO Jack Dorsey said Starbucks CEO Howard Schultz "is excited" about the Square Stand, according to reports from the event. Starbucks invested in Square last year and uses Square for processing but has not used Square's hardware to accept payments in stores.
Square Stand provides merchants using the Square Register tablet app with an integrated card reader and extra business management tools. The Square Stand includes ports to connect to receipt printers, kitchen printers, cash drawers and barcode scanners, all part of Square's "Business in a Box" package developed earlier this year to draw interest from larger merchants.
The new product, Square's first drastic hardware upgrade, may not shake up the retail terminal landscape in a huge way, but Square Stand provides "a nice, innovative design that replaces the ad hoc stands many small merchants were making for themselves" when using an iPad, says Gil Luria, analyst with Los Angeles-based Wedbush Securities.
The new stand will help Square "incrementally" get more customers as merchants trade in old cash registers for a system like Square, Luria says.
Merchants can lock their iPad in place and secure the stand to their countertop, making it possible to tilt and rotate the stand when taking orders, Square states in a press release.
Square Stand works with an iPad 2 or 3, with a version for iPads with Lightning connectors available later this year, Square says. Square is selling the Square Stand at $299, with the hardware being available to purchase at Best Buy and other retailers starting July 8.