Nearly five years after payments company Square launched in Canada, it is introducing support for Interac debit cards for businesses using its point-of-sale system and has developed a contactless chip reader to facilitate those transactions. The chip reader, which will cost $59 and will be available for purchase through the company’s website and at major retailers, was designed by a team of hardware engineers at its Toronto offices. Jack Dorsey, CEO of the San Francisco-based company was in Toronto for the announcement and said it took years of working with Interac and financial institutions to develop the device. “It’s certainly been years but we want to make sure that we are really listening to our customers and what they need and care about and the pain points that they are seeing,” Dorsey said in an interview. “It takes time to make it seamless and something they just turn on and forget about.” Square came to Canada in 2012 but only offered support for major credit cards, something the company said it wasn’t happy with because consumers here tend to use debit cards more than credit. A recent report by Payment Canada found that 24.8 per cent of payments in 2016 were done through debit card, up from 20.4 per cent in 2011. In comparison, credit card use was lower at 21.8 per cent in 2015. Canada is “very different from around the world because of debit,” Dorsey said. To drum up enthusiasm for the device, new and existing Square sellers won’t have any transaction fees for debit purchases made through the rest of 2017 on the new accessory. Originally founded in 2009 by Dorsey and Jim McKelvey, Square’s pitch is that it will act as the middleman between small businesses and financial institutions. So far it seems to be working, as the company continues to grow substantially each year. The company processed more than US$50 billion in transactions last year, up 39 per cent from 2015. In its most recent earnings, Square saw a 26 per cent jump in quarterly revenue and payment volume up 33 per cent to US$16.4 billion. “I don’t actually care what the banks and (credit card companies) are doing because I just deal with Square,” said Ian Baird, owner of the Ontario-based lavender farm Terre Bleu. “We actually went to the banks at the beginning and the process was going to be to get a Moneris system to set up and then not get any information other than do a transaction for me… So the idea that I can just deal with Square (is great).” Small businesses can focus on more important issues than its point of sale system, Baird said, adding that the various levels of government are not always friends of entrepreneurs. “I’m not talking political, I’m talking bureaucratic. They don’t understand the challenges entrepreneurs are going through,” he said. “The regulation, controls and systems and other things they put on top of you is overwhelming… It takes its toll on you.” The next development for Square will be a set of tools to provide more information on customers for the businesses that use it, whether from online or physical sales, to help build stronger relationships. “That’s an asset we have in every market we are in, and it’s a really exciting part of our business that has a lot of potential because we have this really unique relationship with the buyer, which is the receipt,” Dorsey said. “Because of that we can make customer management and relationships easier than any other platform out there. It’s always been a strength that we haven’t really built a lot into and we are really excited to continue to develop that for, ideally, every one of our markets.” Dorsey said Square wants to serve as many small businesses as it can in Canada to help them grow and make it frictionless with one solution. “This is a thriving market for small businesses. Ninety-seven per cent of businesses in Canada are small and that’s our sweet spot, obviously,” he said. “We want to make sure we are building tools that people don’t have to think about whether they will scale with them, but enables them to do so.” Financial Post jomcconnell@postmedia.comTwitter.com/JoshMcConnell
San Francisco-based payments firm Square has rolled out a chip reader that supports Interac debit cards for businesses in Canada using its point-of-sale system. Previously Square only offered support for credit cards. Square said retailers adopting the technology would not pay transaction fees for debit purchases for the rest of this year. CEO Jack Dorsey said the company is also working on tools to get more customer data to Canada's small businesses, which make up 97% of the marketplace. Square processed 39 per cent in transactions across its markets in 2016 and, in its latest quarter, revenues jumped by 26%.