B2B Payments

Square's $Cashtags Goes B2B

Square is making its latest move on the Small Business marketplace with another card processing service aimed at making it easier for SMBs to ditch checks in favor of cards.

In a post on the corporate blog yesterday, Square announced the expansion of Square Cash for Business - an expansion of Square Cash, which first launched in 2013, for consumers.

The first iteration of Square Cash was a P2P funds transfer service that made it easy for consumers to transfer money among themselves via email or the Square Cash app through a link to a debit card.

Square now wants to officially extend that capacity to paying small businesses, artists and nonprofits by making it easy to take debit payments via the Square Cash payment system, too.

Going forward, businesses will be able to create a Square Cash username (or $cashtag). That name must lead off with a dollar sign and, with it, a person or business can automatically set up a simple payment page. Once visitors hit their page, they are given a convenient area to enter card information (and to enter personal data like name, address and telephone number if they've never used the service before).

The goal here is help small businesses and service providers to swap out card payments for paper checks.

"Individuals aren’t the only ones who don’t like checks. They’re inconvenient for businesses too, whether you’re a landlord, a lawyer, a dogwalker, or an interior decorator. We think everyone should have access to a fast, affordable way to get paid, without the inconvenience or lack of security of cash and paper checks," Square noted in its blog post.

Square is charging businesses and nonprofits 1.5 percent per transaction for Square Cash payments - which is a fair clip below the normal 2.75 percent that Square charges. This lower rate reflects that debit payments on the whole are cheaper to process than credit payments. This also counts on businesses to use the Cash Pro system as opposed to using regular Square Cash, which comes without a processing fee. A spokesperson said the company is confident that it can identify when someone is using a regular account regularly for commercial purposes.

The move comes as the P2P space is getting heated up. Facebook announced earlier this week that it will be pushing payments with its own Messenger-based P2P payments system.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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