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Square adds customer loyalty rewards to payment app

November 16, 2011 — 10:07am ET | By Jason Ankeny

Square tells The Wall Street Journal that the updated app gives merchants the flexibility to determine both the terms of the deal or reward offer as well as what constitutes a "regular" customer--e.g., the number of purchases or repeat visits necessary to earn the perk in question. "The merchant has never been able to extend the reward before or automatically recognize who their loyal customers are," Square director of product Megan Quinn says. "Now with this update, a business owner won't just see a name when customers go to buy something, but they'll see a ‘regular' ribbon attached and offer a discount."

Also new in Square 2.2: Merchants may now offer refunds and send receipts for past transactions, customize tip percentage options and search their complete sales history. The Square app for Apple's iPad tablet additionally integrates with the retailer's cash drawer and receipt printer.

Square enables users to accept credit and debit card purchases anywhere and anytime via mobile device. Sellers input the transaction total, swipe the consumer's card through a reader dongle that plugs into the smartphone or tablet's audio input jack, and Square handles the remainder of the transaction, claiming a flat 2.75 percent fee. Last month, Square announced it will begin selling the card reader unit in Walmart stores across the U.S., bringing the number of retail outlets offering the dongle to more than 9,000.

Square 2.2 follows roughly two weeks after the startup introduced a revamped version of its Card Case application for iOS, enabling consumers to make purchases and settle tabs without removing their mobile device from their pocket or purse. Card Case leverages location-based service enhancements in Apple's iOS 5 platform update to identify when a user's smartphone is within 100 meters of a participating merchant. Consumers who've opted in to the Card Case service and attached a credit or debit card to their Square account can automatically open a tab with the retailer and pay for the transaction simply by giving their name.

Square has now signed up more than 800,000 merchant partners. This weekend, Square CEO Jack Dorsey revealed that the company is processing $11 million in transactions each day. Dorsey credited Square's growth to the same dynamics that galvanized microblogging platform Twitter, which he co-founded in 2006: "We haven't defined a lot of how people are going to use them," he said, stating users can adapt each service to their respective demands. "We don't want to make Square all about taxi cabs. And we don't want to make Twitter all about celebrities and politicians."

For more:
- read this Wall Street Journal article