Square producing 10,000 card readers a day
SANTA CLARA, Calif.—Twitter co-founder Jack Dorsey's latest project, Square, which plugs into mobile devices and allows users to process payments, is getting bigger. — During an interview with VentureBeat's founder Matt Marshall as part …
Context & Ripple Effects
Square has been building publicly since January 2010, when Jack Dorsey — still Twitter's co-founder and chairman — unveiled an angel lineup including Kevin Rose, Marissa Mayer, Dennis Crowley, and Shawn Fanning. By August 2010 the traction was real enough that rivals had appeared: Mophie and Intuit's Complete Card Solution both sell competing ways to take cards on a smartphone.
The new datapoint, disclosed by Dorsey in an interview with VentureBeat founder Matt Marshall, is manufacturing scale: 10,000 card readers coming off the line each day. For a company whose product is a physical dongle shipped to every merchant, that number is the difference between a demo and a distribution business.
First-order effects
- Square can now ship readers at the pace of merchant sign-ups, taking hardware supply off the table as the constraint on its small-business rollout.
- Mophie and Intuit's Complete Card Solution face a competitor whose dongle is being produced at industrial volume rather than boutique scale.
Second-order effects
- When every rival can eventually source cheap readers, the dongle stops being the moat and competition shifts to swipe fees, software, and settlement speed — pressure Intuit and Mophie will feel directly.
- Volume reader supply opens card acceptance to micro-merchants who never justified a terminal, expanding the addressable acquiring market for Square and its card-network partners.
Third-order effects
- If cheap, plentiful smartphone attachments hold, card acceptance migrates from dedicated point-of-sale terminals toward software-plus-hardware platforms — restructuring who owns the merchant relationship in payments.
The trend: Payments are migrating from dedicated point-of-sale terminals to smartphone-based dongle services, with reader manufacturing capacity becoming the scaling constraint that separates platforms from demos.