Inventing Twitter is a hard act to follow. But Jack Dorsey, who did just that, is now looking to change the world of commerce through Square, his electronic payment service that swaps out cash registers in favor of smartphone and tablet apps. Businesses pay a 2.75 percent per-swipe fee, and customers who download the Square Wallet app (and link it to their own credit cards) can pay for things hands-free. Farmers' market vendors, independent coffee shops, and even Starbucks use Square, but Dorsey's now looking to serve another group: quick-service restaurants (industry-speak for places like taco shops and bakeries). The new update, which launched yesterday, allows merchants to customize kitchen tickets and handle order modifiers, a much-needed feature for the service industry.
"With this release, we're providing simple features that restaurants expect and need," Dorsey explains over an interview at Little Muenster, a Square merchant (his pick, of course). "People don't always realize how much more they can do with a simpler system they understand. We're seeing folks in the food world go through all the mechanics of payments, and it's terrible and takes away from the experience. Restaurants work so hard on their aesthetics, and then they have to compromise on their counter. They have to buy an ugly point-of-sales system and put it right in front of their customer."
In a dark tailored suit and fresh buzzcut, the billionaire entrepreneur looks like a luxury product himself, which is how he wants consumers to see Square.
"When you go to Prada in Soho, you buy a bag or a tie," he says, "And what do they do? They take your credit card. They go downstairs. They come back with this leather case, and they open it up. You sign. They take it back downstairs. And then they put the receipt in this ridiculous envelope. They hide all the damage, so it makes it feel like you're in this alternate universe. Why can't smaller places do the same? Why do they have to compromise when it comes to one of the important things in their business, which is getting paid for what they do? It's a simple exchange of value."
Dorsey's pretty obsessed with feeling like he's in an alternate universe. He brings up the concept again when explaining the impact Square has on the customer experience. If you download the Square Wallet app, you're able to waltz into a Square merchant and pay just by saying your name. Why be inconvenienced by fumbling for your wallet?
"We want to build products that make people feel like they have superpowers," he says. "Little Muenster can find my name and my picture, and I can walk out without even having to bring out my phone or my wallet. When I'm recognized, it gets me thinking that this is my place, and somewhere I want to go back to. It builds natural loyalty."
The perk that sounds best is the way Square handles tipping. Instead of feeling guilty if you don't have a dollar bill for the tip jar, customers decide on tips after they leave. "When you walk out of a Square merchant, you get a push notification asking you if you want to tip," Dorsey explains. "You can do it on your own time." You might think that would empower cheapskates, but Dorsey says businesses that use Square have actually seen a 22 percent bump in their tips.
But the question isn't whether or not Square is more convenient than cash (it is). The question is whether Dorsey can convince the restaurant industry — a group so resistent to change that many places still use handwritten paper tickets and continue to literally spike them — to overhaul the way it does business. It seems like a tall order. Then again, plenty of chefs are on Twitter now.