Square introduced its first-ever software development kit (SDK) for in-app payments.
It allows app developers to integrate Square payments into their consumer-facing mobile apps by entering lines of code. The SDK — which enables merchants to accept credit and debit payments as well as Apple Pay and Google Pay — allows developers to choose a default payments flow, guiding customers as they enter payment information, or allows them to customize one to fit their specific needs.
The Square payments SDK is available to developers in the US, the UK, Canada, Australia, and Japan who use iOS, Android, or Flutter, Google’s cross-platform application building toolkit.
The in-app payments SDK can allow Square to open another channel to onboard merchants and drive more volume.
- The SDK can be instrumental in Square’s efforts to build out a robust offering. By launching this SDK specifically for apps, Square can generate more volume from merchants across channels, through both their in-store and in-app sales. Expanding omnichannel solutions for merchants is part of Square’s strategy in building out what CEO Jack Dorsey and former CFO Sarah Friar refer to as an “ecosystem” of seller tools, which it has noted is an acquisition channel for the firm to retain customers as they utilize Square for more services like payroll, Square Capital, customer relationship management, among other services. Further, this launch opens Square up to move into a growing space, as mobile commerce (m-commerce) plays a larger role in overall e-commerce in the US: Business Insider Intelligence expects US m-commerce payment volume to grow from $105 billion in 2017 to reach $387 billion by 2023, partly driven by rising popularity of in-app payments.
- And it can allow Square to cater to both of the merchant segments it’s been targeting. Square has been ramping up its efforts to attract larger sellers, which it defines as merchants processing over $125,000 in annualized gross payment volume (GPV) — with products like Square Register — while also continuing to appeal to micromerchants with updates to its flagship dongle to make it compatible with Apple’s Lightning port, for example. The performance of larger sellers has a meaningful impact on Square, as that merchant segment now accounts for 52% of the firm’s overall GPV, up from 43% two years ago. And Square has effectively helped smaller businesses scale: Over 40% of the firm’s larger seller GPV came from merchants that began as small businesses. The payments SDK can provide Square with a way to access and onboard new merchants while upselling existing clients on more services, ultimately opening new sources of volume and revenue.
Innovating new solutions can allow Square to continue its upward momentum following its first quarter of profitability. Square hit its first quarter of company-wide profitability in Q3 2018, growing 51% from Q3 2017 to reach $882.1 million in revenue.
Notably, Square’s subscription- and services-based revenue (SSR) segment grew by over 100% in Q3 2018, making it one of Square’s most profitable segments, and an important segment for the firm to continue building out as it becomes more significant to Square’s overall business.
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