How Square will drive Aussie retailers to cloud

The launch of the Square card reader in Australia is expected to fast track the transition to cloud-based point-of-sale systems, with SaaS accounting vendors Intuit and Xero both announcing partnerships with the company. 

Earlier this week, Square announced the local release of its card reader, which accepts Visa, MasterCard and American Express debit and credit payments with a 1.9 percent charge per transaction.

Cloud integrators told CRN that they expect the Australian growth of Square – which was founded by Twitter's Jack Dorsey – to accelerate the adoption of cloud-based systems and mobility in the retail market, though the upside for IT providers is largely around the knock-on effects of growing the market – rather than concrete opportunities.

Tony Harcourt, chief executive of Queensland cloud integrator Rype Group, told CRN: "We are seeing much larger organisations taking up cloud POS systems and backend inventory that attaches to them. Something like Square coming in with a payment system and making it easier for people to get up and transact faster will only accelerate the move toward cloud-based systems."

Rype partners with Xero, Vend and Kounta, and Harcourt said "it will be interesting" to see how Square impacts these players.

"The Square model of taking clip on the payment on the way through will be attractive to micro-retailers in Australia but I'm not sure as you get bigger – it might be disincentive for the larger organisation to take that clip on the way through. I haven’t looked at their pricing model, but that would be my only question – does it scale up?"

Xero announced this week that customers can connect the Square Register app and Square Reader to its accounting system in less than five minutes. The partnership allows business owners to accept card payments on smartphones and tablets. "Square replaces clunky, expensive cash registers and connects it to Xero," said Trent Innes, managing director of Xero Australia.

Jeffrey Atizado, joint managing director of Sydney-based SMB Consultants, said: "[Square Reader] would be great for a service-based business with no inventory or someone who does not have a POS that will generate the end of day summary."

SMB Consultants integrates emerging SaaS vendors like Xero, Deputy, Vend, Lightspeed, TradeGecko and Kounta for its small business customer base. This part of the market would be rich pickings for Square, though Atizado was unsure how partners could capitalise on its arrival.

"They don't have a sales channel so I'm not sure how SMB Consultants can be involved and add value to their company. However, we would welcome a conversation if they are interested to have a chat."

Cloudifi director Andrew Wilmot, said: "Square is a competitor to the products we sell in the cloud POS space – Kounta and Vend. They [Square] don't have a channel program".

Wilmot doesn't see Square as a big threat to Cloudifi because the vendor focuses on small business. "This isn't a market segment we really service in any case, as this type of customer are mostly setting up their own POS solutions and not engaging us anyway.

"Kounta and Vend already integrate with Xero seamlessly too," added Wilmot.

Meanwhile, Intuit has released the free QuickBooks Online sync with Square app, which enables sales invoices, GST, tips, and discounts to be automatically imported, according to Intuit.

“Intuit research shows US small business owners use 18 or more apps to run their business so they can save time and maximise efficiency," said Intuit Australia acting country manager and managing director Jackie Brian. "Sync with Square will help business owners focus their efforts on running their business, instead of doing the books," she said.

Square launched its Australian operation in May 2015, though had already been offering the free Square app for tablets with the POS system since the end of 2014.