I don’t carry a lot of cash. I carry plastic. My clients carry plastic. I mean, unless you’ve stopped at some “cash only” mom and pop business along a rural road 100 miles from an Internet connection, most businesses in America take credit cards. More and more of sales everywhere, including soda and snack machines, involves the coin of the realm, which these days — is plastic. So when your primary method of payment is plastic (credit and debit cards), and 99% of merchants are set up to take plastic, the machine that takes plastic isn’t the problem you’re trying to solve, right? So if paying for something with plastic is pretty standard stuff, why are consumers leaving Paypal.com in droves to go to Square.com? They both have mobile card readers that attach to a cell phone that let consumers pay with plastic anywhere. Commentators claim Square’s reader is “Apple design chic,” and Paypal’s reader looks “like it came out of a McDonald’s Happy Meal.” So design is part of the attraction, but what’s really so different about Square that their business could pull consumers away in droves from a heavyweight like Paypal?
In simple sales terms? Square understands how people sell and how people buy — and I don’t mean they know we use plastic. The real reason Square is winning the plastic payment showdown as nothing to do with card reader design or transaction costs. It has to do with what all great sales people know really brings in sales — customer loyalty, customer engagement, customer appreciation and a knack for getting customer attention. Square understands its users.
Square engages their customers. They understand them and they understand that shopping is supposed to be fun, that it’s not just about acquiring stuff or spending money. Shopping is an experience and Square makes it that way, allowing people to “pay by name,” or merchants to customize their displays, award loyalty rewards and offer coupons to frequent buyers. Square understands there are real people spending real money behind all those plastic card transactions. Do you? If you don’t, maybe you should.
“Consumers don’t really have a mobile payment problem. Ninety-five percent of the time, paying with cash and credit cards actually works pretty well. Consumers have a mobile shopping problem. There’s a difference.” ~Jack Stephenson, JP Morgan