Pervasive’s Brian Stein was quoted today in a Mobile Commerce Daily article entitled “Square pinpoints email to scale mobile payments”, discussing the launch of Square Cash, a new P2P payment app launched this week. Square Cash is a dedicated application for facilitating the sending and receiving of payments, and the article explores the benefits of a dedicated ap strategy.
An app is a logical starting point for Square to launch their Square Cash system as it immediately gives them a market presence and allows them to capitalize on any brand cachet they already have on the merchant side to grow their market.
“I anticipate that Square will extend Square Cash person-to-person capabilities not only to their other products, but also allow it to be embedded within other applications,” said Brian Stein, managing director at Pervasive Path, Cleveland, OH.
“If you allow users to request payment from friends as part of the checkout process when purchasing concert or plane tickets, it allows Square Cash to become a ubiquitous method for transferring funds between individuals,” he said.
Moreover, the Square Cash system is an open system, which provides the ability to pay anyone who has an email address, allows you to send cash to anyone with just an email address. This is the most exciting aspect of the solution, as the real power lies in being an open system and providing the ability to pay anyone with simply an email address, regardless of whether they are in your “network” by banking with an affiliate institution, or have an account with the provider. This openness is a significant competitive advantage for Square, as Reed’s Law states that the value of a network increases exponentially based on the number of nodes in that network, but by limiting your audience to only account holders, PayPal and banks are automatically reducing the number of nodes in the P2P network and drastically reducing their intrinsic value.
For additional analysis, read the article here.
