Square on Wednesday (Nov. 12) started taking orders for its already-announced EMV readers. The smartphone component will cost $29 and a desktop version $39. To put that into context, Square’s magstripe versions have always been free.
Square said in a blog post that the units will ship “early next year.”
“The chip card readers out there now aren’t ideal for small sellers. They cost hundreds of dollars and are big, clunky, and power hungry. Not the type of thing you want to carry around,” Square said. “The reader is compact—having it fit in your pocket was important to us—and compatible with iOS and Android devices. It processes both magnetic-stripe and chip cards and is extremely energy efficient—it’ll get even the most active Square sellers through an entire day of sales without having to charge.”
Square also reminded merchants of the liability shift. “Chip cards are coming. You’ll need to be able to process them by next October,” the post said.
Much speculation has surrounded Square’s decision to charge.
“The fact that Square is charging for the devices is interesting. On one hand, this is likely related to some of the cost of producing these. In Europe, where chip-based card reading mobile-dongles have been on the market for years already, companies like iZettle, Payleven and PayPal that offer them have also been charging,” said a TechCrunch story. “On the other hand, it also speaks to Square’s own strategy. The company has to date raised just under $600 million, but with its business model based around getting a very small cut on each transaction, and a lot of fierce competition that requires Square to spend a lot of money on marketing and business development, the margins are likely not that great. Charging for this hardware could help Square improve that somewhat. The presence of a chip reader also brings up another point: it means that Square will now, finally, be able to come into new markets like Europe, where a mobile payments company is required to accept chip-based transactions in order to work with companies like Visa.”