Apple 'considered' buying mobile payment firm Square, but Google deal seen as more likely

Posted:
in General Discussion edited April 2014
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.

Square POS


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.

Square Stand


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.
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Comments

  • Reply 1 of 128
    rogifanrogifan Posts: 10,669member
    Wait, so earlier this year Cook made a point of saying a high dollar acquisition is not off the table; Jack Dorsey would rather be scooped up by Apple (because he thinks Square more aligns with Apple's design aesthetic and values) but yet Apple has soured on the deal? Apple would be crazy not to acquire Square, especially with Cook suggesting one of the reasons for Touch ID was getting into the mobile payments space. I think it would be a mistake for Apple pass and easily let Google swoop in. The thought of Jack Dorsey working for Google makes me want to vomit.
  • Reply 2 of 128
    jungmarkjungmark Posts: 6,687member
    Apple should buy Square just as long as it's not a ridiculous bid.
  • Reply 3 of 128
    miltenbmiltenb Posts: 6member
    $8bn...

    Are worth that ? If so, there is certainly enough cash lying around...
  • Reply 4 of 128
    rob53rob53 Posts: 2,028member

    Does Square own any patents or would this purchase only give them customers? If the latter, then $8B is crazy.

  • Reply 5 of 128
    doggonedoggone Posts: 181member
    The point is that Apple add companies that enhance their vision and enable new products to be made. Square has a product that is highly visible already and it would be hard for Apple to integrate that. They potentially could buy Square and run as a subsidiary (bit like Filemaker) and then learn from its technology and client base.
    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.
  • Reply 6 of 128
    cmoebiuscmoebius Posts: 10member

    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?

  • Reply 7 of 128
    irelandireland Posts: 17,584member
    They should have bought them two years ago.

    But they should still do it if they can pay $8B.
  • Reply 8 of 128

    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. 

  • Reply 9 of 128
    tbelltbell Posts: 3,146member

    Deleted

  • Reply 10 of 128
    tbelltbell Posts: 3,146member
    Quote:
    Originally Posted by CMoebius View Post

     

     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. 

  • Reply 11 of 128
    rogifanrogifan Posts: 10,669member

    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.

  • Reply 12 of 128
    solipsismxsolipsismx Posts: 19,566member
    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?
  • Reply 13 of 128
    paxmanpaxman Posts: 4,595member
    Quote:

    Originally Posted by Rogifan View Post

     

    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. 

  • Reply 14 of 128
    paxmanpaxman Posts: 4,595member
    Quote:

    Originally Posted by SolipsismX View Post



    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. 

  • Reply 15 of 128
    rogifanrogifan Posts: 10,669member
    paxman wrote: »
    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. 
    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.
  • Reply 16 of 128
    gatorguygatorguy Posts: 20,583member
    rogifan wrote: »
    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 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.
  • Reply 17 of 128
    island hermitisland hermit Posts: 6,217member
    Quote:

    Originally Posted by Rogifan View Post





    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.

  • Reply 18 of 128
    solipsismxsolipsismx Posts: 19,566member
    paxman wrote: »
    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 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).
  • Reply 19 of 128
    rogifanrogifan Posts: 10,669member
    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.
    And the chances of that happening are??? We've heard exactly one rumor (from the WSJ) about Apple's mobile payments plans and it didn't sound like anything that would be happening soon.
  • Reply 20 of 128
    rogifanrogifan Posts: 10,669member
    gatorguy wrote: »

    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.
    Cook could give him a role like Bob Mansfield working on special projects. Apple has a pretty lean executive team. How much time do they have to think about big picture stuff? When Cook fired Forstall he didn't replace him, he just added more work to the existing executive team. I'm sure right now Ive and Federighi are knee deep in iOS 8, OSX (9to5Mac says one of Ive's top priorities right now is a redesign of OSX) and new hardware. Cue has all of iTunes, App Store, maps, Siri, Apple TV and Apple's professional apps. How much time does he really have to think about a future mobile payments system? And honestly I don't see Cook as the big picture guy, I still see him as the one making sure the trains run on time and everyone is moving in the same direction. I think Cook could find a role for Dorsey (if he wanted it).
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