Square-off vs. Cash Register #2

from INC magazine 5/13 enhanced by Peter/CXO Wiz4biz 9/13

The “Square” Sells itself !!!
Despite Square’s rapid growth, which recently earned the company a valuation of $3.25 billion, there’s not a single salesperson among its 500 employees. “The product sells itself,” Dorsey says. That fact was apparent at the Artists & Fleas pop-up Craft Fair in downtown Manhattan, which Dorsey visited one Friday afternoon in March. “It’s fantastic!” a thoroughly tattooed, classic New York character named Tony Stinkmetal gushed. He and his friend Keith (“Golly”) Bishop run Golly NYC, a company that sells custom super-hero T-shirts, house-wares, & clothes made of children’s sheets & sleeping bags. Stinkmetal [what a name] says he started using Square because his last credit card processor took several days to deposit money into his account. Square does it overnight. “Everyone who has a business right now is kind of scrambling,” he says, “so those two days make a big difference.” Mike Lindwasser, a photographer with a booth at the market, praised Square’s analytics. Standing nearby as Lindwasser tells his story, Dorsey looks proud. This is why he started Square.

The Creation Myth of Square
As the oft-told story goes, the idea for Square came about after Jim McKelvey, Dorsey’s friend & former boss (who is a computer engineer & skilled glass blower), missed out on a $2,000 sale of one of his glass faucets. McKelvey, like millions of small-business owners in the country, couldn’t accept his potential customer’s credit card. So he, Dorsey, & an iOS engineer named Tristan O’Tierney developed what would eventually become Square to ensure this would never happen again. “I knew what it was like to be a small merchant and be excluded from commerce, because I didn’t have a credit card system,” says McKelvey, who now sits on Square’s board.

Over-coming a Road Block
As it turned out, Dorsey, McKelvey, & O’Tierney’s dream directly violated the major Credit Card companies’ rules. At the time, they banned so-called “payment aggregators”, which allow people to accept credit cards without a merchant account. (The aggregator acts as the merchant.) The card companies had made an exception for PayPal, an online aggregator, but mobile aggregators were a different story. If Square was going to work, the card companies would have to rewrite their rule books. So Dorsey took a clunky but functional prototype to the major banks & credit card companies and gave them a demo. Within six months, they came around.

[ Square Wallet, Competition, Square off against the World in final Premium Content ]