Square Takes Its First International Step: Payment Service Now Live In Canada
Square has taken its first step outside of the U.S. for its mobile payment service: it is now live in Canada. The company said today that its mobile card reader/processor is now available nationwide …
Context & Ripple Effects
Square began by bringing card swiping to mobile devices in 2010, then gained strategic backing through Visa's investment in the mobile-payments startup. Its Canadian rollout follows a $200 million funding round, a Starbucks deal and a new monthly small-business pricing option, giving the company more resources and distribution credibility as it moves beyond its original market.
Canada is Square's first test of whether its reader-and-processing model can be replicated nationwide outside the U.S. The move shifts Square from proving mobile acceptance at home to operating a cross-border merchant service.
First-order effects
- Canadian small businesses can sign up for Square's mobile card reader and processing service nationwide, extending Square's merchant base beyond the U.S.
- Square must support its service in a new national market while continuing to sell its hardware-and-processing model to merchants.
Second-order effects
- Square's Canadian merchant acquisition becomes a direct challenge to payment providers serving small businesses there, particularly where simple mobile card acceptance is the differentiator.
- The company’s fixed monthly pricing option gains a broader test market, making predictable processing costs part of its international merchant pitch.
Third-order effects
- If Square can reproduce its U.S. model abroad, mobile payment providers will increasingly compete on the ability to localize merchant acquisition and service, not only on card-reader hardware.
- The expansion points toward small-business payments becoming a cross-border software-and-processing business rather than a market limited to a provider's home country.
The trend: Mobile-payment companies are moving from proving card acceptance on smartphones in one market to scaling merchant services across national borders.