Member Spotlight: Square, Community payments

As many businesses can attest, access to payment rails that allow one to pivot to online sales has been essential in surviving the economic pressures presented by Covid-19. Consumers are using less cash, and businesses are resorting more and more to moving online. NAB has noted that there has been an 800% increase in the number of merchant facilities opened compared with April of last year. The Reserve Bank of Australia has noted in a March report that cash-based consumer payments have dropped to 27%, down from 69% in 2007. Cash withdrawals have also been impacted, dropping 32% in April compared to February. This has opened opportunities for digital marketplaces and businesses, products such as cryptocurrency, and the potential for digital cash (which we covered in a previous Member Spotlight), and payment providers. Square has been one such payment provider that is pivoting to help its customers as they adapt to a new way of working. 

Square online store software operating on a mobile device

Responding to the huge surge in online spending among consumers, Square has been supporting businesses to take their operations online. “The use of cash is definitely on the decline in Australia, and COVID-19 has only further accelerated this trend,” said Caitlin Walsh, Head of Communications and Policy at Square Australia.

“With the early adoption of mobile wallets and tap-and-go technology, Australia has one of the most advanced contactless payments markets in the world. From our big banks right through to our smaller fintech startups, the financial services sector here offers great technology options that are safe and easy to use,” said Ms Walsh. “Now, as we do everything we can to reduce contact with commonly transferred items, like cash notes and coins, these services are only going to become more common and ubiquitous with our daily lives.”

Square’s eCommerce offering has seen strong adoption over recent months, especially among hospitality businesses, with vendors opening virtual storefronts using Square Online Store to cope with reduced foot traffic caused by social distancing restrictions. In response, Square has added a curbside pickup feature, on top of its in-store pickup option, and launched a self-managed contactless delivery option too. Square has also launched a new program aimed at supporting local businesses through the purchase of eGift Cards, called Give and Get Local. This program enables businesses to generate cash flow while being closed or affected by recent social distancing restrictions, and provides an easy way for consumers to find and support local businesses. 

Some Square customers have completely changed their operating model to adapt to Covid-19 restrictions. Popular Sydney Eatery Mark & Vinny’s, for example, used Square to quickly launch an online store in lieu of physical customers, which enables them to quickly and effectively secure cash flow for their business, keeping employees employed. Similarly, Melbourne’s American Doughnut Kitchen has shifted to a digital-only store-front using Square, as well as developing a loyalty program and selling gift cards to customers to reinforce their cash flow. Square has also seen more drastic efforts to pivot from some of its customers. “We saw some businesses offering new products during the shutdowns, like distilleries manufacturing hand sanitiser, clothing stores making custom face masks, and hospitality venues offering goods that were in high demand and often out of stock at supermarkets, like flour, eggs and milk,” said Ms Walsh.

Mark & Vinny’s owner, Vince Pizzinga, with his Square Terminal

Square also sees the value in not only building a community during the pandemic, but supporting and nurturing that community. “We reimbursed businesses who were subscribed to our industry-specific software, like Square for Restaurants and Square Appointments, through March and April,” said Ms Walsh. “We also enabled a ‘pause subscription’ feature for all of our software services, so businesses who were not operating as normal could pause any fees being charged for services they did not need.”

This sense of community also permeates internally, with the company implementing various forms of support for their staff as they were forced to transition to working from home arrangements. “One of the most important focus areas for us through the transition to having a more remote workforce has been to ensure that we maintain the same sense of community and purpose, said Ms Walsh. “We have tried to address this in a few ways. Firstly, by listening to employees we survey our employee base twice a year and also recently rolled out a workplace survey to ask people specifically about their working from home experiences and needs. 

“Secondly, we have made sure everyone has access to the resources they need to be successful. We provided all employees with a stipend when we first moved to working from home to create a better home working environment. Finally, we focussed on greater transparency and overcommunication. We’ve rolled out new email updates, more regular all-hands, developed resources for managers on leading distributed teams, and supported employee communities, like our Parents group.”

A common theme among fintechs during this pandemic is that a sense of community and empathy is gravitated towards. This is certainly a comforting trend, and one that bodes well for the health and longevity of the fintech ecosystem going into the economic impacts of the pandemic and beyond.