Apple 'considered' buying mobile payment firm Square, but Google deal seen as more likely
Both Apple and Google have reportedly had internal discussions about making respective offers to buy mobile payment company Square, though Google is seen as the more likely of the two to actually go through with a purchase.
The apparent interest in Square from two tech giants was revealed on Wednesday by Re/code, which said Apple and Google both considered the deals within the last year. Google is seen as "the most likely acquirer," given its existing Google Wallet platform, and its propensity to engage in high-profile, high-dollar purchases.
Acquisition rumors surrounding Square have reportedly "run rampant" in recent weeks, with an offer of $8 billion or more said to be something the payment company's team would seriously consider.
But it was also said that a sale of Square to Google would disappoint CEO Jack Dorsey, as sources reportedly indicated that Dorsey believes Square's "design aesthetic and values" are more closely aligned with Apple than Google. Because Dorsey does not want to sell to Google, it's been speculated that Apple could swoop in for a purchase.
However, Apple has yet to make a billion-dollar acquisition, preferring to spend its cash pile on smaller, more strategic deals. And Wednesday's report suggested that "Apple has soured" on the prospect of making an offer to Square.
Apple Chief Executive Tim Cook hinted in January that his company is interested in entering the mobile payment space, something that could be done securely thanks to the Touch ID fingerprint sensor currently exclusive to the company's flagship iPhone 5s. Cook publicly said his company is "intrigued" with mobile payments, and revealed that such uses were one of the driving factors behind the introduction of Touch ID last year.
"You can tell by looking at the demographics of our customers, and the amount of commerce that goes through iOS devices versus the competition, that it's a big opportunity on the platform," Cook said.
Apple already carries Square products for mobile transactions in its retail stores. Offerings from Square include the free reader, which plugs into the headphone jack on an iPhone or iPad and allows credit cards to be swiped into a corresponding application, and the Square Stand, a more full-featured point of sale system that utilizes Apple's iPad.
Square profits by taking a 2.75 percent cut of all transactions through the service.
The apparent interest in Square from two tech giants was revealed on Wednesday by Re/code, which said Apple and Google both considered the deals within the last year. Google is seen as "the most likely acquirer," given its existing Google Wallet platform, and its propensity to engage in high-profile, high-dollar purchases.
Acquisition rumors surrounding Square have reportedly "run rampant" in recent weeks, with an offer of $8 billion or more said to be something the payment company's team would seriously consider.
But it was also said that a sale of Square to Google would disappoint CEO Jack Dorsey, as sources reportedly indicated that Dorsey believes Square's "design aesthetic and values" are more closely aligned with Apple than Google. Because Dorsey does not want to sell to Google, it's been speculated that Apple could swoop in for a purchase.
However, Apple has yet to make a billion-dollar acquisition, preferring to spend its cash pile on smaller, more strategic deals. And Wednesday's report suggested that "Apple has soured" on the prospect of making an offer to Square.
Apple Chief Executive Tim Cook hinted in January that his company is interested in entering the mobile payment space, something that could be done securely thanks to the Touch ID fingerprint sensor currently exclusive to the company's flagship iPhone 5s. Cook publicly said his company is "intrigued" with mobile payments, and revealed that such uses were one of the driving factors behind the introduction of Touch ID last year.
"You can tell by looking at the demographics of our customers, and the amount of commerce that goes through iOS devices versus the competition, that it's a big opportunity on the platform," Cook said.
Apple already carries Square products for mobile transactions in its retail stores. Offerings from Square include the free reader, which plugs into the headphone jack on an iPhone or iPad and allows credit cards to be swiped into a corresponding application, and the Square Stand, a more full-featured point of sale system that utilizes Apple's iPad.
Square profits by taking a 2.75 percent cut of all transactions through the service.
Comments
Are worth that ? If so, there is certainly enough cash lying around...
Does Square own any patents or would this purchase only give them customers? If the latter, then $8B is crazy.
Alternatively they could make it part of a new type of store purchasing setup that could be applied to high street retailers.
I, for one, like the idea of Apple setting up a CC company, using its cash as collateral. It already has millions of CC info and being part of that chain may be profitable.
Unlike other acquisitions, the tech does not seem that special. Square simply made an ease of use approach for CC payments. Definitely very Apple like and already copied.
I would have agreed with you a couple of years ago, but this is today.
When I saw Apple introduce Touch ID at WWDC last year, I knew that Apple was not just looking at this for unlocking your phone and making iTunes purchases. They were most likely thinking that they would try it out for iTunes purchases, work out the bugs, and then use it for their own payment systems. They already have hundreds of millions of iTunes accounts with linked credit cards and a secure way for people to access them, with no dongle.
I believe it is a waste of $8B to acquire Square when Apple has already laid the groundwork for their own payment system. I mean, really, what are they getting for that money that they already do not have in place now?
But they should still do it if they can pay $8B.
If Google buys Square, I'll cancel that thing in a heartbeat. I've been using PayPal Here anyway, only because the funds are available immediately and I have the PayPal debit card.
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I mean, really, what are they getting for that money that they already do not have in place now?
Map data, and an entrenched base using its products. Currently, I have seen quite a few restaurants and stores using iPads with Square in their businesses. Google would like switch all that to Android tablets. With that said, 8 billion seems pretty high, but it is a seller's market.
Maybe it's not so much what Apple is getting as keeping them from being swooped up by Google. I wouldn't mind having Jack Dorsey at Apple to provide some strategic thinking/vision. I'd rather have Dorsey working for Apple than Google, that's for sure.
I don't see Apple including a CC scanner directly on every iPhone and iPad, and the dongle doesn't look like something Apple would do. So what expertise or IP would Square have for Apple and how would it solve the real issue of being able to go into nearly any major retail outlet and pay with your Touch ID or "PayBook" app with their current system that doesn't use BT-assisted NFC?
Maybe it's not so much what Apple is getting as keeping them from being swooped up by Google. I wouldn't mind having Jack Dorsey at Apple to provide some strategic thinking/vision. I'd rather have Dorsey working for Apple than Google, that's for sure.
If it is important for Apple to keep Square out of Google's hands then that is part of what Apple would be getting. Either way the decision will be strategic and long term. Aesthetically, and functionality wise Square is definitely a better match with Apple than Google, hat's for sure.
What does Square offer Apple that Apple can't do themselves? Apple already has hundreds of millions of CC and debit cards on file, they just need a better infrastructure for allowing this to be used for mobile payments; but this means a solution with major vendors whereas Square is only for small operations.
I don't see Apple including a CC scanner directly on every iPhone and iPad, and the dongle doesn't look like something Apple would do. So what expertise or IP would Square have for Apple and how would it solve the real issue of being able to go into nearly any major retail outlet and pay with your Touch ID or "PayBook" app with their current system that doesn't use BT-assisted NFC?
Exactly.
On a slightly different note, I'd love to see Apple bypass the cc companies altogether and mainstreaming an alternative such as Dwolla. I can't see them doing it but it would be truly disruptive and upend the CC industry.
I don't think it would matter all that much. He'd be unlikely to stay there for any appreciable time anyway. Do any of the founders of companies snatched up by Apple still work for them? Maybe there's a couple but IMO entrepreneurs don't often make a good fit with large established companies and their hierarchy.
Yeah I do think it would be worth it just to keep a competitor like Google from swooping in. But if Apple is already thinking way beyond what Square is doing I hope we hear about it at WWDC. It's getting a little frustrating hearing rumors about all the things Apple is thinking about but not actually doing. I keep waiting for the thinking to become doing.
What would really make me dance is to see Google buy Square for >$8 billion and then have Apple unveil a killer system of its own.
I think Square charges a lot for these small business owners. Apple could do it as a value-added service for selling more iDevices and controlling the ecosystem better which would probably make people get on-board very quickly. Now what if they also applied this to major vendors so if you use "?Pay" they might only loss 1.5% instead of 2-4% of that digital transaction. It would then behoove everyone to adopt to a BT-assisted NFC solutions quickly.
What do you need to become a financial institute? The iTS, App Store and iBookstore are tied together already (I'm not sure about my regular iTunes account that can be used at store.apple.com or with the Apple Store app for expedited check out).
PS: Imagine having your paychecks direct deposited into your iTunes account. (I don't think that is the direction they will go).