Sample Article Review Paper on Hip to be Square Case Analysis


Square is a startup that developed in the year 2009 through the innovation of a device, which utilizes a tablet or smartphone to swipe credit cards. As such, the innovation of the device permitted small firms and businesses to offer convenient processing of credit cards from their customers, which heavily relied on the availability of a signal. In 2012, Square received funding from credit card companies that were in excess of $340 million, which enabled it to hire several hundred employees within a period of just three years. Additionally, the company processed in excess of $10 billion worth of debit and credit card payments from owners of small businesses that relied on Square’s card swipe service. Payments made using Square’s device depended on the availability of wireless or cellular internet service. This study will undertake a critical analysis that focuses on the growth of Square and the competition that faces the mobile payment industry. In doing so, the paper will offer strategic recommendations, which emphasize increasing the profitability of Square.

Growth of Square Company

Nonetheless, the remarkable trajectory of Square faced myriad challenges as new firms were attracted to the mobile payments processing industry. New entrants in mobile payment processing became evident within the United States and in other countries abroad. With Square enjoying humongous funding from various investors, which amounts to more than $3.4 billion, investors and management continuously review the strategic position of the firm towards enhancing the maximum growth of the company. The company formulates, develops, and implements strategies that aim to address the competitiveness that come with the entry of other firms to the space of mobile payment processing. Strategic partners such as Visa have continued to invest in Square with a resolute that focuses on increasing the marginal profits for their own benefit. As a seasoned entrepreneur, Jack Dorsey invented the square mobile payment-processing device in the year 2009, and its uptake kicked off immediately when merchants received a fee from sales organizations for accepting credit cards.

Industry Overview of Mobile Payment

Debit and credit card history dates back to the 18th century with the earliest reference made in the 1890s. The popularity index of the cards increased through the 1920s when their usage in loyalty programs such as vendor-specific programs increased more especially by hotels, gas stations, and department stores. The innovation of software that could read and analyze the data of the customers fuelled the current ubiquity of the card with a target of helping banks in the identification of profitable customers. In light of that, customers who could possess balances and had the lowest probability of defaulting the said balances remained to be profitable to the firms that allowed credit and debit cards. The adoption of customer balances built on their loyalty accelerated the uptake of debit and credit cards in the 1970s and 1980s.

On top of that, with technological advancement witnessed towards the end of the twentieth century, there was an increase in the transactional volume of credit and debit cards, reaching an estimated $3.5 trillion as of 2011 within the United States. Additionally, it is imperative to note that, most of the growth resulted from debit card transactions that saw a growth increase of eighty percent in the period between the year 2006 and 2011. Similarly, there was a small growth margin of seven percent in credit card transactions in the same period stated above. In the United States, transacting with a credit card involves five parties who include the cardholder, the merchant, acquiring banks, issuing bank, and credit card association. A merchant accepts credit cards as a mode of paying for purchases whereas credit card associations develop and market brands of credit cards such as Visa, American Express, Discover, and MasterCard.

Innovations in Mobile Payment Processing

Historically, merchants were to be in possession of a landline phone connection to enable them to undertake credit card processing. The connection based on the landline phone facilitates the transmission of crucial information vital in finalizing a given transaction. Nonetheless, with the proliferation in connectivity that relied on the wireless networks, both Wi-Fi and cellular, merchants could undertake many transactions in a day without having to rely on wired, fixed connection points. Moreover, with the development of the cellular market, payment using mobile phones has been on the increase more particularly based on four models, which include premium-based mode of payment, mobile web payments (WAP), direct mobile billing, and countless near-field communication payments.

However, with the latest innovations, there is an embedding attempt to eliminate reliance on a card reader by focusing on the use of NFC technology, which uses a radio frequency identification chip. The growths in transactions that rely on mobile are likely to accelerate in the coming years due to the anticipated further innovations on mobile. The projection in mobile transactions growth points to more than eighty percent of customers embracing the point of sale mobile payments by the year 2017.

Mobile Payment Competitors

The development and proliferation of internet access and smartphones have seen competition rising from various mobile payment firms, which are continuously innovating within the space of mobile payment processing. Majorly, the innovations are focusing on both the customer side and merchant side with an intention of discovering a system that enhances the experiences of the customers. Accordingly, firms such as Square must come up with a well-thought framework that can effectively address the competitive challenges brought by new and incumbent competitors.

MasterCard is one of the mobile payment competitors in the market. It was the first firm to develop a system of countless payments. The company tested its system in the year 2003 in Orlando, before rolling it out to the United Kingdom. In an endeavor to market its payment mechanism, MasterCard collaborated with commercial banks with accounts having a MasterCard name. Nevertheless, in the United Kingdom, some banks started issuing MasterCard Pay Passcards without the notification or consent of their customers as opposed to earlier scenarios whereby they could seek the customer’s consent or request. By the year 2011, there were approximately ninety-two million Pay Pass cardholders worldwide, with three hundred and eleven thousand merchants accepting the said cards.

On top of that, Google developed Google Wallet in the year 2011, which is an android application that is comprised of Pay Pass technology. The Wallet allows individuals with NFC phones to add their current credit and debit cards to the Google Wallet and consequently link them to a MasterCard account. Google Wallet enabled convenience to the customers by collaborating with retailers in offering targeted advertising and special discounts. The ads and discounts that come with Google Wallet ensure an elaborate customer experience through the location information and transaction data that such ads depend on.

Besides that, Visa is another mobile payment-processing competitor that is contingent on a payment system referred to as Pay Wave. The payment system resembles MasterCard’s Pay Pass but it does not offer virtual functionality in digital cash. In an attempt to popularize its services, Visa got into a partnership with Isis, which is a partnership venture of AT& T, T-Mobile, and Verizon. Additionally, PayPal is another online system that has had previous success in the online business particularly in the 2000s. In the year 2013, PayPal launched a platform referred to as Here that depended on audio jack of tablets and smartphones to process card payments. PayPal enabled merchants to use camera phones to undertake checks and scan cards.

Competitive Strategies for Square’s Mobile Payment Processing

With the entry of new mobile payment processing companies and the uncertain landscape of the industry, there is a need for Square to formulate, develop, and implement sound strategies that will holistically focus on making the company remain competitive in the market. One of the strategies that Square Company can adopt to remain competitive in the mobile payment processing space is to embrace organic growth.

In contemporary American businesses, there are still merchants or small businesses that do not accept customers to use credit cards. As such, the scenario presents the company with room for expansion or organic growth through continued execution of the previous model that has proved successful in the market. However, with the entry of other competitive startups such as iZettle that offers similar services like Square, the competitive strategy pegged on organic growth may not work or be sustainable as it was during its takeoff stage.

Furthermore, Square Company is focusing on international expansion, primarily after closing its Series D round worth $200 million. The proceeds from that particular closure will be important in earmarking the international development of the company. Nonetheless, there are well-established competitors abroad, which have already sought recognition and acceptance by local authorities in the host country. Similarly, on the same note, some overseas companies are expanding into the home turf of Square thereby limiting the profitability of the company each day(Rizea, 2015). From the above discussion, it is evident that Square heavily relies on smartphones to process card transactions. The uptake and popularity of smartphone platforms in the rest of the world are not similar to the United States as marketplaces across the globe vary. The success of Square Company in the United States relied on store merchants that were tech-savvy and design-oriented.

Moreover, in an attempt for Square to remain competitive in the mobile payment processing space then, it expanded the base of its customers by undertaking an adjacent move towards the expectations of its customers. However, Square shifted from its earlier orientation that relied on customer experience through single location selling points into high-volume and multi-unit supply chains carrying out a larger number of transactions. The partnership between Starbucks and Square best exemplifies the change in transaction capacity of the company. Similarly, in 2012, Square collaborated with Burberry in an endeavor to leverage on its already large experience in sales. Burberry is a company that focuses on the experiences of its customers by continuously relying on the connection they make towards their brand and businesses. The created connection between customers and business brands will ultimately foster a culture of loyalty among customers.

Interestingly, Square has expanded its product offering to the already existing customer base. After the realization that organic growth was difficult to achieve in the face of contemporary competition, Square started offering expanded products to its customers at a cheaper cost, which included Square readers, a cash drawer, a receipt printer, and a tablet stand. The expanded product offering was a way of creating demand on the side of retailer merchants since the devices could cost less as compared to earlier costs of installing the entire system of Square’s mobile money processing(Rizea, 2015).

Lastly, Square has earmarked a mechanism of offering additional end-user services to its pool of customers. Market observers have challenged Square to leverage its network of users and start offering additional services other than its focus on mobile money processing. Previously, Square Wallet allowed its customers to undertake individual wireless transactions, but currently, the company cannot manage to carry out transactions of bank accounts and credit cards for its customers. Therefore, Square can start offering the said functionality while at the same time giving supplementary financial services products such as scheduled bill payments, basic budgeting, and other additional personal finance products.

Strategic Recommendations on Square Achieving Profitable Growth

As discussed above, it is evident that Square has been formulating and implementing competitive strategies to align the core objective of the business with the needs of the customers while at the same time remaining globally competitive. Similarly, in light of profit maximization in the marketplace, it is imperative for Square to device market-oriented mechanisms that align profitable growth with their customer experiences.

One of the strategic recommendations for enhancing Square’s profitable growth is through the creation of differentiated value. Customer segmentation creates differentiated value through the knowledge that customers cannot be equal in the market. In some instances, customers could seek benefits or value in the market that different firms cannot offer; therefore, there should be customer segmentation, which is essential in uncovering the attitudes, characteristics, and behaviors of customers(Mcgarry& Yamshon, 2015). The other important aspects of customer segmentation that Square should incorporate in its growth strategy include product category, geography, stage of production, and distribution channels.

Value creation is an essential aspect of creating differentiated value, which has a strategic significance of enhancing the profitability growth of Square. Value creation depicts the symbiotic relationship that exists between the customer and the business. Value resonates around what customers have offered to gain the benefits of a given product. Market analysis and research is important towards understanding the expectations of the customers. The other ways of creating differentiated value for customers include value proposition and competitive advantage. Value disposition entails the creation of differentiated services or products with an aim of creating value for a company’s target customers. Competitive advantage helps a company to achieve sustainability through value created for target customers. Therefore, Square should focus on creating differentiated value in the marketplace to achieve profitable growth.

On top of that, Square can align and link various processes in an endeavor to achieve profitable growth. Just as organizational structure depicts the shape of an organization so do processes describe the flow of the structure. As such, it is imperative for Square to have tools in place that are vital in aligning processes, which include linkages and operating mechanisms. Typically, processes indicate connected activities that carry information within an organization, and they include management and work processes(West, 2012).

Moreover, aligning recognition and rewards is an important step towards achieving profitable growth for Square. Recognition entails reinforcement of acceptable behaviors in the realm of emotional needs whereas rewards involve reinforcement of behaviors constructed on rational needs. Poor management of behavior leads to delayed organizational initiatives, high employee turnover, there is organizational confusion, which leads to failure in meeting the expectations of the organizations (Kumar, Sharma, Shah & Rajan, 2013). Nonetheless, aligning behavior with organizational expectations leads to clear organizational change initiatives, results, employee engagement, which in turn leads to the creation of shareholder value. As such, Square can leverage on behavior management of its employees in an attempt to achieve profitable growth.


One of the best approaches to achieving organizational profit growth for Square is through acquiring, developing, and engaging talent to the extent that an organization is able to achieve continuity in terms of its workforce(Mcgarry& Yamshon, 2015). Accordingly, for an organization to achieve the above variables, it must institute soundly formulated policies and philosophies of attracting, managing, recruiting, developing, and onboarding key talent. Therefore, the human resource manager(s) of Square are duty-bound to provide leadership as a means of achieving consistency and standards vis-à-vis the employment and development of employees’ talent(West, 2012). For instance, the square can be able to attract and retain new talent through various approaches such as team building, performance management, and competency mapping.


Kumar, V., Sharma, A., Shah, R., &Rajan, B. (2013). Establishing Profitable Customer Loyalty

for Multinational Companies in the Emerging Economies: A Conceptual Framework. Journal Of International Marketing, 21(1), 57-80

Mcgarry, c., &Yamshon, L. (2015). How Square aims to bring Apple Pay into mom-and-

pop shops. Macworld – Digital Edition, 32(8), 63-66.


Rizea, R. D. (2015). Growth Strategies of Multinational Companies.Economic Insights – Trends

& Challenges, 67(1), 59-66

West, P. (2012). Today’s contradictory challenges in achieving profitable growth: strategy

guidance for “re-imagining”. Strategic Direction, 28(8), 3-5.