If anyone doubted the power of Square, which does one thing and does it well, here’s a pretty salient fact for you – the company is processing transactions at a rate of $5 billion per year. Just a month ago, it was boasting of a rate of $4 billion per year. That’s a 25% rate of growth in one month, and it’s representative of how the market of mobile payments has exploded in the first half of 2012.
Of course, with that explosion comes an increasing amount of competition. Square’s biggest competitor is now PayPal. With PayPal’s new mobile credit card reader that can deposit any in-person transaction directly into a user’s PayPal account, the differentiation that Square offered has been harshly limited. And PayPal isn’t the only one. A slew of new mobile payment startups have launched in the last few months.
Square does still offer benefits above and beyond PayPal. For example, it recently confirmed that any credit card swipe performed before 5:00 PM on a business day will be deposited into the user’s bank account on the next business day. PayPal and other services can take 2-3 days or even longer. Square also landed a potentially huge deal in New York City, where it is currently running a pilot test to become the preferred provider of credit card payments in New York taxi cabs.