Sorry Square: Etsy Just Released Its Own Mobile Card Reader

E-commerce site Etsy just launched its own mobile card reader to help its more than 1 million sellers better run their businesses offline.

Etsy made this move to help its shop owners better integrate its online and offline business - the card reader and accompanying app will help them keep track of inventory and sales all in one place. But it also feels like blow to Square.

Square's core business is making little card reading dongles for small business owners, like Etsy sellers. A bunch of Etsy shop owners were likely already using Square's mobile payments option. Etsy's card reader will have the same 2.75% swipe fee as Square does, but will offer a more integrated experience with its marketplace. It makes sense that sellers would make the switch.

At this point, the mobile payments dongle space is getting increasingly crowded. Amazon just launched its own version in August and PayPal and Intuit have them too. If more e-commerce marketplaces like Etsy release their own readers, it could take away a chunk of Square's market.

Etsy says that 35% of its shop owners sell their goods at craft fairs or flea markets, as well as online, so this new device will help them better connect their retail experiences. Like most card readers out there, Etsy's dongle will be free.

Etsy will also provide people who buy something through its card reader with a receipt that links back to the sellers online store, to encourage future online purchases.