TechCrunch is reporting today that Apple and mobile payment processor Square were briefly in talks about a possible acqusition. The talks didn’t get far, it seems, as the two companies couldn’t reach an agreement on how much Square was actually worth. Eventually, Square walked away:
Separately, TechCrunch has heard that Square and Apple were in acquisition talks, but that Square walked away. Apple wanted the company to come aboard, but the discussed price was a sticking point: Apple wanted to buy Square for around $3 billion, one source said. Square, valued at the time at a firm 66 percent delta to that price point, declined to accept.
It’s interesting to consider what Apple Pay might have looked like if the merger had gone through. You can read the more over at TechCrunch.
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Square, Apple is going to crush you. Accept the offer. They’re being very generous.
Square after hearing about Apple Pay: Oh crap…
And actually Square is about accepting payment, which Apple hasn’t discussed yet with Apple Pay, but I would assume it is coming (eventually).
just imagine that in the near future you will be able to give money to someone with Apple Pay as easy as a wire transfer…. When all money becomes digital, what would stop apple from becoming a bank? Everything will be paid for with Apple Pay using iCredits or iCurrency… just wait and see
I agree, short term, Apple Pay is a great thing for Square as Square will be accepting Apple Pay. However, if Apple allows receiving payments through Apple Pay, then Square will be negatively impacted. However, Square is more than just about receiving payments, it’s more about having a whole retail system. Apple would need to release something like Apple Merchant.
Can see this is where IBM comes into the picture.
Apple already has that and much more with First Data’s Clover Station.
First Data isn’t owned by Apple. In order for Apple to be competitive in the payment receiving business that Square and First Data are in, Apple would have to have a product or service.
It might make an interesting additional option, but at the moment there’s no overlap. I’m not sure Apple needs anything from Square after getting in so tight with the card issuers for Apple Pay. If Apple decides to roll something out in the future it will already be in a power position for the best rates in the industry. Plus likely have a hardware plan that caters to a global audience. Square’s mag-stripe only option isn’t very appealing to anyone outside the US.
Courting PayPal on the other hand…
Not that eBay would let them go – and picking up eBay in the deal just to get PayPal might be a little too rich.
I don’t see why Apple would ever want to get into the business of making hardware for accepting payments like Square does. Maybe one day we will be able to send money between iPhone’s using Apple Pay, but I don’t think Apple has any intentions of developing hardware to process physical credit cards.
Thinking of sending money, it would be great if someone could pay you using Apple Pay with only your iPhones. Perfect for when you don’t have any cash.
“… don’t have any cash ” would be most people after overpaying for a new iPhone that has last year’s features!
OMG, it has a SCREEN! NO WAY, thats SO LASTYEAR! DURRRR
“Apple also showed Square a raft of hardware that would compete with Square’s point-of-sale tools, said the same source.” – that is from the article.
Apples long term go is to make CCs obsolete. At which point square will cease to serve a purpose. NFC Apple Pay cash transfers will take over the void
WHAT hardware? The new phones have NFC. ALL new cards from late next year will include NFC. Get it?
Oh, America. You’re so far behind with your credit card technology. All new cards! Ha! Every other country around the world has had NFC for years. Canada has had NFC in credit and debit cards for 3 years now.
I’m sure they showed Square, or rather told them BRIEFLY, about hardware from other third party vendors that will be releasing competing systems (MFi or otherwise).
In other words… “Listen guys, we’re offering you the same amount of money we offered Beats, and by all accounts they carry more clout as a stand-alone entity. We’re giving you a great buy-out deal for a space that is soon going to be very crowded. Sign on for this generous deal and some decent bonuses or take your chances in the middle of an industry that is about to completely pass you by.”
Well, think of all of the small Mom and Pop stores that can’t possibly afford to update to a new Terminal system and take mobile payments. This is where square could come in. Since Apple is in so tight with all of these card processing/payment companies – and is actually going to be collecting a percentage on every sale – they’d be able to negotiate extra low rates for these Mom and Pop shops. Right now Square is 3% and Amazon is 2% – Apple could charge 1.5; be making more per transaction than their competition AND collecting a larger percent than through the traditional POS NFC systems (which is how Apple Pay will operate come October) and provide their customers with the largest group of individuals with Apple Pay and credit cards on file.
Square would be great for adding to the POS on the merchant side of things; inventory, time keeping, scheduling, paying suppliers, paying employees, POS, bookkeeping and so on. Imagine how easy it’d be for anyone to use any iPhone or iPad without a dongle and accept payments. Think of all of the iPhone sales where businesses require you write a cheque… uh, rent being the number one source of cheques in North America. Envision all of those transactions taking place between two phones, where Apple’s cut 1% of each transaction. Average rent out to $1000, at $10 per payment (1%), $120 dollars a year. Per apartment/home. Globally.
Personally, I see Apple starting with large retailers – then moving into smaller business. Where Apple will have to provide the solution/merchant side of things. At the same time becoming a replacement for PayPal with online shopping. Allowing one-click payments on Macs, PCs and iOS. Then moving into interpersonal payments allowing friends to transfer money to one another over iOS and moving in on physical cheques/cash. Even a miniscule percentage is incredible. A miniscule percentage of every transaction in the world would dwarf all other revenue streams for Apple. During the iPhone event they mentioned 12 billion daily transactions in the USA alone. At 438 Trillion dollars annually, if Apple took just 1% that would earn them 438 Million. In one country. Only counting credit and debit.
Merchants don’t buy the equipment. It’s incorporated into their merchant fees. It’s in the best interest of the banks to upgrade all their merchants to new tech ASAP.
Otherwise an astute observation.
Apple wanted to buy Square. Apple is going to allow users to accept payments through ApplePay. It’s called a merchant account. Square was foolish not to accept and when they do come back to the table, Apple will be smart to offer less. Once you decline a generous offer, there are no guarantees or reasons to believe that same offer will exist. Business is Business.
Also from the article – “Apple also showed Square a raft of hardware that would compete with Square’s point-of-sale tools, said the same source.”
They will definitely launch hardware. They appear to be getting a cut from the CC companies, this will allow them to double dip and take a cut from merchants too. I say we see payment hardware in 18 months or less, as long as they see a strong start to Apple Pay.
I can’t believe they turned down $3B. That’s nuts. Their offering is not unique, it’s an accessory, their value comes from their customer base and processing agreements. Maybe they think Google or Facebook will come knocking with $6B.
I have contected with Square before. They are really square head. I think they are too greedy. How difficult to have apple to build a better system like Square? They should think about future. Short sight!
Someone needs to make the POS systems of the future, that will of course, except Apple Pay.
Square should have one singular focus going forward, and that’s how to build relevant future POS systems that accept Apple Pay.
You meant: accept.
Everyone in this business needs to invest a lot of money to make a worldwide platform. The current mag stripe solution is practically dead; chip and pin is a solid solution, and NFC is, well, still quickly evolving.
Square? They need to take a billion and spend it in order to compete. Apple is investing huge in this space. Google missed the boat due to almost zero investment. Only MC and Visa and AMEX have spent more, but in a haphazard way.
Yes, chip and pin is fantastic. It’s used world-wide, except for the US. US credit card companies don’t like the cost of the cards, but fraud in the US is skyrocketing due to the ease of theft in comparison to countries with chip and pin. Despite this, US credit card companies are not switching to chip and pin – rather, chip and signature. Apparently, someone from VISA, in response to the chip and signature variant of the more secure chip and pin technology said: “Americans can only learn one thing at a time.”
If even one thing.
Oh my. Why on earth would they turn it down?? With all the power and position in the global market that Apple already has, once they roll something out that’s anything like Square, they’re likely to squash Square like a bug. Or they could just make card dipping and swiping obsolete – which I’m sure would also be easy once ApplePay is running like a champ.
‘Yep’ man gave this story a big ‘no’ today
And now google or facebook or Microsoft wil but it to “compete” with apple pay.