Today mobile payments startup Square announced its first international launch in Canada, days after signing a lease for a new office space in San Francisco to house what will be a 1,000-strong U.S. team by the end of 2013. There has been much speculation about when Square would expand internationally, especially since competitors like Europe’s iZettle have been heating up, with that company expanding its $31.4 million in Series B funding this week.
Square’s founder and former Twitter co-founder Jack Dorsey announced the Canadian launch this morning, introducing both English and French sites. The launch gives Canadian businesses access to Square’s credit card reader, which lets merchants accept credit card payments anywhere by downloading the Square app and plugging the reader into the headphone jack of Apple or Android smartphones, as well as iPads. The readers will support Visa and MasterCard right off the bat, with plans to support more payment cards.
Canadian merchants will also have access to its Square Register mobile point-of-sale (POS) solution, and both the POS feature and credit card readers charges the same 2.75 percent per-transaction fee as in the U.S. The Square Wallet app, which lets consumers pay via Square at retail locations, as well as access local businesses in the recently-launched Square directory, hasn’t launched yet, though Dorsey said on Twitter it will be launching soon (the Canadian website says it will launch for iPhone and Android in 2013).
“We see an entrepreneurial spirit and focus on small business growth in Canada, which makes Canada the right place to start our international growth,” Square spokesperson Khobi Brooklyn said in an interview. “Right now we are focused on taking everything we’ve learned, and continue to learn, in the U.S. and applying it to Canada.”
There has been no word on other international launches as of yet though. “Our goal is for Square to grow globally. Currently we are focused on U.S. growth, but we hope to begin offering Square to international markets this year. Beyond that we don’t have specific plans to announce at this time,” spokesperson Lindsay Wiese said in a recent interview.
Since launching in 2009 the company has raised over $300 million in funding, and is now reportedly valued at $3.25 billion. It processes over $8 billion in payments annually, with more than two million businesses and individuals signed up. The company has reportedly been testing the service with several Canadian merchants prior to today’s launch, and Dorsey told the Financial Post that although there is no Canadian office, the company has one employee based in Waterloo.
It’s been a busy year for the company – it announced a major partnership with Starbucks in August, which will allow consumers to pay via Square in over 7,000 Starbucks locations across the U.S., and introduced a flat monthly plan for businesses, who can pay $275 to use the company’s Square Register point-of-sale solution (for companies with up to $250,000 in annual revenue), rather than paying the usual 2.75 percent per-transaction fee.
Right now Square’s biggest competitors are PayPal Here, which is also available in Canada, as well as iZettle internationally, with smaller competitors like LevelUp trying to compete on the point-of-sale side, and Google Wallet and Apple’s Passbook trying to compete on the consumer payments and loyalty side.
It will be interesting to see not only how merchants adopt the service north of the border, but how the impending Square Wallet launch is adopted by consumers. With Square looking to broaden its international footprint (it’s already started to build out its European offices), Canada will likely be a testing ground of how it can build up its service outside the U.S. Expect more partnerships with merchants, payment card providers and financial institutions to help beef up Square’s offering for both businesses and individuals, as well as international launches based on lessons learned from the Canadian launch.
Update: this article was updated with input from Square after publication.