Square wants to give businesses a super easy, cheap way to accept payments
The company is only charging business users a 1.5% processing fee, which is significantly lower than the 2.75% it charges businesses that use its signature white card reader.
The company first launched Square Cash in 2013 as a free way for people to send each other money -similar to competitor Venmo - and says it has processed over $1 billion annually since.
The app will still be free for personal use, but now Square has the benefit of having a bunch of people already in its system who will be able to easily start using it to pay businesses.
With today's announcement, the company also rolled out something called "$Cashtags." Here's how it works:
Anyone who wants to accept payments through Square Cash can create their own personal handle called a $Cashtag. Each Cashtag has a corresponding webpage (for example, I created the Cashtag $jillianiles, so my web URL is cash.me/$jillianiles). To send a person or a business money, all you have to do is enter your debit card info on a cash.me page and hit "Pay."
The Cashtag approach is neat, because it allows people or businesses to accept money without physical payment, and without even having to give away their real name or email. Square uses an example of a photographer setting up a Cashtag $SunsetPhotography to accept easy, safe, and secure payment for their work.
The announcement comes at a time when everyone's working on a peer-to-peer payments service. Besides PayPal and Venmo, Snapchat and Facebook both launched their own super-simple way for people to pay each other as well. Now, Square is trying to bring that easy-to-use ethos to a format that will actually be able to make it money. Although it's unclear how much of the processing fee for businesses Square will actually pocket itself, it's still more money than companies get from completely free peer-to-peer services.
Watch Square's promo video here: