Square unveils Stand, a countertop point of sale systemMay 14, 2013: 11:23 AM ET
The fast-growing payments startup is making an aggressive play for larger retailers.
FORTUNE -- Early last year, Square, Jack Dorsey's fast-growing mobile payments startup, made an unusual hire: Jesse Dorogusker, an Apple hardware executive who was responsible for docking stations, headphones, and other peripherals, joined as vice president of hardware. The move foreshadowed a foray into gadgets by Square, which is best known for its white plastic credit card reader for iOS devices, but executives were mum on the details.
On Tuesday, Dorsey and Dorogusker unveiled the first major fruit of their collaboration -- Square Stand, a slick stand made of molded white plastic that cradles an iPad to make a countertop point of sale system. The device marks a shift for Square, which has built its fortunes by catering mostly to small merchants like hairdressers, personal trainers, and food trucks. Dorsey, who is Square's co-founder and CEO, said Square Stand is aimed at brick-and-mortar retailers with higher volume of transactions than the company's typical early customers.
The $299 Stand is conspicuously Apple-esque (AAPL) in its design and has a sturdy built-in track to swipe cards. Like earlier Square products for merchants, it can connect to a cash register and a receipts printer. It screws onto a countertop, and can swivel to face the merchant or the customer.
While several companies had built countertop stands for iPads out of various materials, Dorsey said Square saw an opportunity to integrate Square's point of sale software, Register, more tightly with a hardware device. "We believe in this perfect marrying of software and hardware," Dorsey said in an interview Monday. "It should be so easy that it truly disappears."
The device will put Square in more direct competition with sellers of traditional point of sale systems, as well as younger companies like Revel Systems, that market registers that are built around the iPad. Dorsey said Square is pricing Stand aggressively, suggesting that the company cares less about turning a profit on the devices and more about recruiting new merchants to Square's payment system. The company said Tuesday that it is now processing payments at a rate of $15 billion annually, up from $12 billion a few months ago.
Stand is available for preorder on the company's website and is expected to ship on July 8. Best Buy (BBY) and other retailers will also sell the device, Dorsey said. About a dozen merchants, including Blue Bottle Coffee in New York and San Francisco, Federal Donuts in Philadephia, Pitango Gelato in Washington and Baltimore, are already using Stand.
Dorsey, whose company last year began processing credit card payments for Starbucks (SBUX), said he would like the giant coffee chain to use Stand. "We have been talking to them about it," he said.