Square Adds Gift Cards To Its Mix

Square is getting back into the gift card business this holiday season — but this time, the mobile payments service is selling physical cards to its retailers, according to TechCrunch.

Square announced on Tuesday (Nov. 18) that merchants using its Square Register will be able to buy customized gift cards for $1.50 each, with no additional charges when the cards are sold or redeemed. When a merchant’s customer purchases a gift card, funds are automatically deposited into the merchant’s account the next business day, so there’s no waiting for the card to be redeemed to collect the cash.

Square claims that other gift-card providers charge as much as $3.50 per card plus additional redemption and transaction fees, putting them out of reach for small retailers.

To process a gift card, the merchant swipes them like a credit or debit card. The merchant’s Square point-of-sale system automatically updates the value of the card, which can also be reloaded at any time. Customer analytics for card usage are all part of the system.

In late 2012, Square launched a digital gift card service for its now-defunct mobile wallet as a way to encourage new Square Wallet users. Both the wallet and the digital gift cards were shut down in May 2014. This time around, Square is letting individual merchants control the process of selling and redeeming the cards.