NEW YORK (
Square's changing the game again, this time, by waiving the deposit limit hold on transactions entered manually to help merchants get their money even faster, and by expanding the company's ecosystem even further.
Square, which charges a flat 2.75% fee per credit card swipe and 3.5% plus a 15 cent fee per manual transaction, Wednesday announced that it would be eliminating holds and deposits on credit card transactions that are manually entered, allowing merchants to get their funds within 1 to 2 business days, the same for swiped transactions.
"At a small company like ours, it is all about cash flow," said Vadim Semenov, co-owner of Planet Construction in a press release issued by Square. "We're remodeling 15 kitchens a week and typically take payments over the phone. If we don't get our money quickly, we can't buy the drywall, flooring, or lumber we need to get our projects started. Not having to worry about deposit limits is huge for my business and our customers."
Square has continued to broaden its ecosystem over the past several months, launching a flurry of new products, including Square Stand, Square Market and Square Cash, as the company continues to make inroads into the mobile payments space, which features companies such as eBay's (EBAY) PayPal.
Companies such as PayPal and others still place holds and deposits on manually entered transactions, so Square latest move continues a trend of trying to separate itself from the pack.
Not only is Square allowing merchants to grow quicker by getting their money faster, they are giving them alternative ways to become aware of Square, especially on mobile. Faryl Ury, a Square spokesman, said in an email that 40% of traffic coming from Square Market is from a mobile device and 20% of those selling on Square Market have never taken a Square payment before. Given also that 50% of Square Market buyers are new to Square, the San Francisco-based company appears to be doing all it can to increase awareness about its products and services.
Ury also noted "nearly 70% of businesses who have purchased a Square Stand are either entirely new to Square or did not previously use Square on a regular basis."
Outside of product announcements, the Jack Dorsey led-company has been in the news recently as speculation about a potential initial public offering heats up. The company recently added former Goldman Sachs CFO David Viniar to its board, replacing Starbucks CEO Howard Schultz, who joined the board as part of an financing round last year.
The IPO could value the company at a market capitalization of around $4.5 billion, based on recent private market transactions.
-- Written by Chris Ciaccia in New York
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