Square’s Rabois: Retailers Will Opt for iPads Over Registers Within 18 Months
Square’s COO Keith Rabois is predicting that nearly all retailers will be running their business off an iPad or comparable device in the near future.
When pressed for a time frame in a recent interview, Rabois claimed that the transition could take place in as little as 18 months.
This would be a very fast pace, given that so many merchants have already invested thousands of dollars in their point-of-sale machines — not to mention other hurdles, such as getting employees up to speed on new systems.
Still, Rabois, whose business relies on this happening, is insistent.
“The era of standalone machines is over,” said Rabois, a former executive at PayPal. “Everyone will be migrating to iPads and comparable devices, which will be powered by an app — that is, hopefully, Square.”
We’ll see, but now Square has the money to try to make it so, finally confirming earlier today that it has raised a fourth round of capital. After months of rumors and an announcement last month that Starbucks would be one of its investors, the San Francisco-based payments company said it completed a monster round, totaling $200 million. This now puts it at a $3.25 billion valuation, according to sources. A spokesman would not confirm that amount.
The company said that it plans to use the money for more expansion. Over the past year, Square has already moved beyond handing out magnetic-swipe readers to anyone who wanted one to offering more robust experiences for both consumers and merchants. That now includes software on the Apple iPad, which acts like a register, and an application on the iPhone or Google Android phone that allows consumers to pay without using cash or plastic.
Square is not the only company that believes the transition will happen fast.
A survey by the National Retail Federation last fall found that while only 6 percent of retailers said they used mobile point-of-sale devices, half of the respondents said at the time that they planned to adopt such devices over the next 18 months. Additionally, about 75 percent of U.S. merchants said they intended to buy a tablet over the next year, according to market researcher NPD.
In the interview, which took place a few weeks ago, Rabois elaborated on his vision.
Essentially, Square’s biggest goal is to enable any merchant, regardless of their resources, to offer a mobile experience similar to the one Starbucks offers today through its application. In August, Starbucks announced that it was investing in Square, and was going to start using it to process all of its credit and debit transactions.
“Any merchant that is focused on customer service and the ambiance of their experience will be intrigued by what we offer,” Rabois said.
But if merchants are indeed eager to change out their legacy systems for something more digital, Square won’t be the only option for them to choose from. Other companies, such as eBay’s PayPal, Verifone and Intuit, also allow merchants to upgrade their systems without any additional hardware, as well as offering their own mobile-based solutions.