Square Now Processing $1 Million In Mobile Payments Per Day
Mobile payments startup Square has reached a new milestone this week—the company is now processing $1 million in payments per day, co-founder Jack Dorsey just Tweeted. — Square was processing a few million in mobile transactions per week …
Context & Ripple Effects
Square's volume milestone is the commercial payoff of its hardware ramp: by September 2010 the company was producing 10,000 card readers a day, and after fixing the iPhone 4 compatibility gap with a new reader that October, it closed a $27.5 million round led by Sequoia Capital in January 2011.
Going from a few million dollars per week to $1 million per day, announced by co-founder Jack Dorsey on Twitter, marks the point where Square's dongle-plus-app model stops being a demo and starts looking like real payment processing infrastructure for small merchants.
First-order effects
- Small sellers using Square's reader gain reliable card acceptance at scale, validating that a phone plus dongle can replace traditional merchant terminals.
Second-order effects
- Incumbent card processors and rival mobile-reader startups face pressure to match Square's frictionless onboarding, since the $27.5 million Sequoia round gives Square capital to subsidize growth.
Third-order effects
- If daily volume keeps compounding, payment economics for micro-merchants shift toward software-defined terminals, with the platform's take rate rather than hardware sales becoming the profit engine.
The trend: Card acceptance is migrating from dedicated terminals to smartphones, with venture-funded upstarts like Square turning payment processing into an app-distributed service.