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Square launches new product for merchants who won’t give up on terminals
By: MarketWatch | October 19, 2018

The company’s new Terminal device is expected to help Square attract larger merchants

Square Inc. got its start selling dongles that allowed merchants to accept card payments from their iPads, but the company has more recently been branching into sleeker, smarter versions of traditional payments hardware.

The company on Thursday announced the Square Terminal, its take on the little grey or black devices that we type our PINs into at the bodega or dry cleaner. The Terminal has Square’s SQ, -0.68% software built in and lets merchants change the prices of items, add tipping, or view their transaction history from the point-of-sale device itself.


Square’s hardware chief, whose team designed the Terminal, was formerly Apple’s director of engineering for iPhone, iPad, and iPod accessories.

Jesse Dorogusker, Square’s head of hardware, told MarketWatch that merchants often have trouble getting traditional terminals, since they have to apply, meet credit requirements and deal with monthly charges. Square’s device eliminates the most annoying fees that come with some traditional terminals, such as a monthly security fee and a “hibernation fee” that kicks in when retailers haven’t made any card-based sales in a given month.

Square has been trying to move upmarket and expand its services to larger merchants, and the Terminal is part of that strategy.

“I think in the end this will be consistent with working with bigger and bigger businesses,” Dorogusker said, though he also thinks the device will be an attractive option for merchants that haven’t traditionally accepted card-based payments.

The company has seen success with its efforts to draw in larger sellers, a move that has benefited the company’s financial results. Square said last quarter that 50% of its sellers recorded more than $125,000 in annual gross merchandise volume, up from 46% a year earlier. Square last year launched the Register, a larger point-of-sale system, also aimed at more sizable merchants.

Sarah Friar, the company’s outgoing chief financial officer, said at a conference earlier this fall that she thought the company could attract “the biggest businesses in the world.”

While the tablet-based solutions are appealing to some merchants, others see terminals as a sign of legitimacy or are resistant to using a personal device for business operations, according to Dorogusker. He expects Square’s device to hold appeal because of its transparent fee structure and sleek design, a departure from the “yellowed rubber keypad and monochrome displays” found on rival products. The Terminal also connects to Wi-Fi, so sellers can bring it to restaurant tables or salon chairs and take payments away from the counter.

The company will charge 2.6% of every transaction plus 10 cents. The Terminal costs $399 but comes with a $300 processing credit.

Square’s stock has gained 13% over the past three months, compared with a 0.7% drop for the S&P 500 SPX, +0.05%

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