Square launches gift cards
news.cnet.comThis would have been nicer had it launched about 3 weeks ago. Square-wallet gift cards would be great easy holiday gifts.
(it also seemed like an obvious feature ever since Square launched. Running loyalty and gift cards is one of the ways to get out of the 1-2% gross margin ghetto for just processing visa/mc, which is one of the big problems with a payments startup. Even if you process hundreds of millions of dollars in transactions, it's hard to make enough from the fraction of a percent left over after variable costs to cover your fixed costs, let alone turn a profit. Yet, even on day one, you need huge scale and high reliability.)
Gift cards as generally implemented today are awful. You pay for something now that often doesn't get used for a long time. In lots of cases gift cards don't get used at all. IIRC it's something like 25% of the time. It might be a bit less with digital cards that you can't lose, but it'll still be significant. It's disappointing that Square's offering doesn't adress this core deficiency.
On the contrary, that is precisely why businesses offer gift cards. It's because empirically some X% of gift card value never gets redeemed (the number I've heard is 10%, but that doesn't matter). To a business, selling gift cards without a discount is free profit.
It's Apple's Passbook but explained right. Good job.
But keep in mind that you have to be a square merchant in order for your customers to use this. Passbook uses barcodes.