[sytelus]

Square as well as Stripe have really changed PoS space. Before they arrived, the devices for PoS were truely ugly, unfriendly, hard to acquire and hard to use. I see tons of small businesses converting their PoS devices to Square/Stripe ALL the time. They are like iPhone for PoS. The potential is massive. They get huge amount of transaction data which alone is probably worth a billion dollars (customer habits, usage pattern, targeting, BI etc). They can easily expand in to integrated inventory, accounting and tax system which is well beyond billion dollar industry by itself. If you visit any super market or traditional retail space, one thing that would immediately catch your eyes is arcane PoS that literally runs on Win2000 based CE code. Even though it is super critical for running business, innovations in this space have been few and far between. if you have ever even tried to use any small business accounting/tax/inventory software you would know how pathetic and 1990-ish these software are. Given small businesses have limited resources, expertise and savvyness, this space is ripe for disruption. If there was easy to use, realtime, scalable, well integrated PoS system with smart customer focused analytics putting great business intelligence on fingertips of moms and pops, it would be worth its weight in gold for businesses owners. Square/Stripe could easily outpace SAP and Oracle in market cap/revenues if they play their game right and target this market with full force. The cut in credit card translations is small and probably irrelevant part of the story.

[notJim]

I think the problem is that though Square really did change things there (I agree w/ you), the space now is very competitive with a lot of different players, and it's not clear what Square can do that their competitors can't. It doesn't seem like there's really much lock-in or network effects that are helping them out.

[sliverstorm]

At least for a while they had powerful brand name recognition and a head start.

Bigger, badder competitors (i.e. VISA) seem like they haven't been interested in competing with Square, and you can leverage momentum & recognition against smaller newcomers.

[adventured]

In the case of VISA, they have to be very careful when it comes to anti-trust issues. It already cost them six billion dollars last time around.

The last thing VISA wants to do, is take over the entire payment system. That's why they're not really attempting to compete with Square or PayPal. They could trivially buy someone like Square.

VISA's golden goose is exactly where they're sitting today: no serious anti-trust burden, massive margins, low overhead brand-based business model. The minute they start trying to own everything, the goose gets shot. Today they do $5.4b in profit on just $12.7b in sales - what can a very modest business like Square offer them on top of their massive 42% net income margins to offset the anti-trust scrutiny they'd be taking on? Absolutely nothing.

If VISA tries to take over the payment processor space, Discover and Mastercard will immediately go in for the kill on anti-trust.

[potatolicious]

I dunno, I think the effects of brand recognition is perhaps overstated. I think one of the chief problems Square has run into is that while their products are great, merchants are looking at the bottom line - they would pay for an inferior but functional PoS solution if it means cheaper rates.

Square has more recognition with the public at large - but that also has little pressure on merchant adoption. After all, you're not going to refuse to swipe your card at the coffee shop because their PoS isn't Square.

Anecdotally over the past couple of years I've seen a proliferation of other PoS systems (all iPad-based) at merchants around me that are decidedly not Square. Square may have carved out the market initially, but the vacuum is being rapidly filled with players that aren't Square.

[wgx]

VISA are investors in Square.

[chemmail]

I think you really hit it on the head, Square really needs to integrate a real inventory, accounting system and you might have a real winner. I've used all the competitors, but so far go back to square. Their software is great for small inventories, but do no scale well. Intuit's software is pretty antiquated and integration is really pathetic and they are really dishonest with their fees.

Square more ancillary offerings are really terrible though, like their online store and loins. They are also offering more services with "hidden" fees like instant deposit which they charge an extra fee if you read the fine print. They are also losing out in online transactions with google, amazon, visa, mastercard, and amex doing half ass jobs.

The B&M marketplace is in for a big shift with the chip and pin starting to commence. I've only used it twice, but so far the machines that read them are ridiculously slow and cumbersome. I'm still waiting on my Square reader to see if they have a good solution.

This is a big pie, and Square needs to capitalize on its good start if not be overuse by the old goliaths.

[tosaket]

They can easily expand, but they already have established competitors in that space, such as Xero and Quickbooks. Give a shot to Xero, it definitely has all the things you desire for.