Clover Vs. Square: What’s Next In This POS Competition?

Clover, the point-of-sale operation owned by First Data, keeps growing, and that could present more challenges for Square.

First Data reported its Q2 financial results on Monday (July 30) and they showed that Clover has been processing in excess of $65 billion in transaction volume on a global basis, up 50 percent year over year. Clover is “well-positioned in the market,” CEO Frank Bisignano said during First Data’s post-earnings conference call.

First Data plans to keep pushing its Clover advantage. After launching in Germany and Austria earlier this year, Clover will debut in Argentina and Canada during the coming months, Bisignano said during that call. First Data is also working with the Girl Scouts so that its U.S. members can use Clover for electronic payments.

As well, “our distribution partners will offer the Clover platform through the digital signup solutions that are now starting to go live on partner websites,” he said. “And we are integrating Clover into CardConnect and BluePay’s ISV solution sets to further differentiate our offering in the integrated channel.”

The recent growth for Clover does not mean First Data plans a hard push to gain more of a foothold for Clover with larger enterprises, though.

Clover remains a “primarily an SMB solution,” said First Data chief financial officer Himanshu Patel, during the call. While Clover has won clients among larger operations such as stadiums and entertainment venues, he said the product “was never really designed for very large enterprise merchants. We may have a couple of one-off cases where we do some stuff there, but we kind of think of the core market that we target on Clover is SMB and mid-market.”

Square, meanwhile, is scheduled to report Wednesday (Aug. 1) after the market close. Expectations — and pressure — were high earlier in the day, given that the company’s stock nearly doubled this year. Earlier this week, though, Square’s stock nosedived ahead of that earnings release, in part because of concern about the company’s push into the bitcoin space.

“On the conference call, investors will be focused on new products and services, the integration of recent acquisitions, Cash App updates and progress in international markets, analysts say,” Bloomberg said in a report in advance of the earnings release.

Bitcoin, subscriptions and services all played a part in Square’s 45 percent year-over-year total revenue growth in the first quarter of 2018. For Q2, investors also will be eyeing Square’s progress in its POS technology and services.

The company in May announced the launch of Square for Restaurants, a fully integrated point-of-sale platform for full-service restaurants. Square for Restaurants is cloud-based and customizable, allowing managers to update menus and floor layouts remotely across multiple terminals and locations. Businesses can easily manage operations for both the front and back of house.

And Square, much like First Data and Clover, is hoping to find POS success overseas. The company recently announced that it has launched Square Stand — which makes an iPad into a POS system — in the U.K., a move designed to appeal to small- and medium-sized businesses.

“Sellers in the U.K. have been asking for a full countertop solution for their businesses since we first introduced Square,” said Jesse Dorogusker, Square’s hardware lead. “Investing in the U.K. is priority for Square, and bringing Stand here is a great way to expand our global support for local businesses.”

The new Square earnings report will provide more clarity of how its offerings fare against Clover, and where this battle for customer acquisition and retention goes next.

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