Many consumers may know Square from its card reader and point-of-sale payment system. But in recent years, the company has built a comprehensive business platform on top of payment capabilities. Through its seller product suite, Square merchants can sync payments with online and offline orders, inventory, e-commerce, logistics and other merchant tasks in one place.
To support its platform efforts, Square offers a set of APIs through which partner developers can build tailored solutions or extend its capacities. This month, Square launched a series of upgrades to its partner program that unlock new capabilities, including the Terminal API, which allows developers to connect payments device Square Terminal to any point-of-sale, enterprise resource planning or practice management system.
“The Terminal API connects the Square Terminal to apps built on any platform,” Marylise Tauzia, head of platform marketing at Square, said at the company’s annual developer conference Square Unboxed last week. “We’re excited to offer payments integration for developers building specialized point-of-sale or business management solutions.” It also expands the types of businesses that Square is able to serve, including servicers and healthcare providers, she added.
Square’s Terminal API is the latest major upgrade to the Square partner program, which was launched at Square Unboxed alongside some additional initiatives for partners. Key goals include building deeper relationships with sellers and attracting larger merchants.
“We started with that little white reader for mobile payments, and while we’re still well known for that, there’s so much more that we can provide today,” said Amrita Ahuja, Square’s chief financial officer. “The opportunity we’re going after here is vast, and we see multiple levers to drive growth from new products, new geographies [and] reaching new customers, including expanding our reach upmarket.”
Square’s partner network
Square currently works with more than 700 partners, according to Ahuja. Partners cover everything from accounting to inventory management to mobile ordering. Examples include GoDaddy, Intuit QuickBooks, Mailchimp and Shippo.
Square’s platform is bolstered by recent acquisitions, including website builder Weebly, which it bought in 2018 for $365 million. Weebly is the engine behind Square’s seller toolkit Square Online Store. In 2014, Square acquired on-demand food and delivery catering service Caviar, which it sold to DoorDash in 2019 for $410 million.
Square has steadily grown a host of APIs for partners over the past six years. Examples include orders, catalogs, inventory, loyalty and disputes. The company’s partner ecosystem includes platform partners, which build features that extend Square’s first-party experiences, and solutions partners, which craft custom integrations.
“What companies really need is to provide a complete, holistic and connected use of business data,” said Tauzia. “Most solutions do not do this today, or they are not obvious enough.”
Since Square’s partner program was launched in 2018, seller adoption of partner solutions has more than doubled, and the company expects to reach 1 million partner-connected sellers next year. Meanwhile, the number of Square’s managed partners has quadrupled in the last two years.
Effects of the pandemic
For Square, the pandemic was optimal timing to extend partner capabilities, as businesses adapted to stay-at-home mandates.
“Even this year, during the disruption of a pandemic, our open platform enabled us to win new business with increasingly sophisticated sellers from ski resorts to multi-location restaurant businesses, who are taking the slowdown as a moment to reevaluate their commerce stacks,” said Ahuja. “In each case, a combination of our APIs and our partner ecosystem played a critical role in designing future-looking commerce solutions.”
Since the onset of the pandemic, Square Online Store helped sellers deliver more than 4.5 million curbside pickup orders, representing 24% of Square seller gross purchase volume, the company reported.
David True, partner at payments consultancy PayGility Advisors, told FinLedger that Square’s expansion of API connectivity for developers would help the company appeal to larger merchants who typically require more complicated integrations than micro sellers. Companies that have some product overlap include payments companies Stripe and Finix, and commerce platform Shopify, he noted.
“As they try to go after somewhat bigger merchants, that’s where the integration is going to become more important,” he said. “From that perspective, it was a very wise move to make it easy; it’s becoming a connected world where payments get built into something else.”
Despite a trend toward client diversification, CEO Jack Dorsey emphasized the importance of supporting small, local businesses.
“My mom created a coffee store in St. Louis, and I would always ask the question, ‘Why can’t we be like Starbucks and open locations all over the country all over the world?’ and she wanted to stay small,” he said. “Now, we do have technologies where an entrepreneur like my mom can choose to stay small and focus on depth instead of going as broad as possible, and I think that’s really powerful.”