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Square Launches In-App Payment Processing

Daniel Sparks, The Motley Fool

Square (NYSE: SQ) was missing one key channel when it came to payment processing -- at least until today. The financial-technology company announced on Wednesday that it is launching a software development kit (SDK) enabling developers and sellers to accept in-app payments. Before today, Square had products to help sellers accept payments in-person and on the web, but not in mobile apps.

Square's in-app payment SDK opens the floodgates for more growth in the company's payment processing business, which is already seeing strong growth. More importantly, it solidifies Square's strong value proposition to larger sellers as the company continues to move beyond the small businesses it started with years ago.

A sketch of Square's in-app payment processing feature

Image source: Square.

Square's newest SDK: in-app payments

"With this SDK, developers leave the complexity of payments to Square and focus instead on providing a delightful buyer experience," Square said about the new in-app payments SDK in a press release on Wednesday. "The In-App Payments SDK is available for iOS, Android, and Flutter starting today in the United States, Canada, UK, Australia, and Japan."

Requiring "just a few lines of code" for developers to implement, the new SDK shouldn't be mistaken as overly simplistic. It's a powerful and customizable tool that works with most payment types, including major credit cards, debit cards, Apple Pay, Google Pay, and more. In Square-like fashion, the product looks elegant and is easy to use, boasting an "interactive user experience that guides buyers as they enter their credit card information, preventing errors and providing a smoother checkout experience."

Two beta users of the in-app payments SDK, PepperHQ and Brushfire, had good things to say about it.

"The Square In-App Payments SDK is a slicker implementation than other options in the market and felt frictionless from the beginning," said PepperHQ chief product officer Adam Robinson. As a company that builds apps for hospitality companies, PepperHQ has a good idea of what makes apps compelling and more user-friendly. "We were able to customize the look and feel of the flow so that it looks the way our clients want but still feels native to the app so it's trustworthy and honest," Robinson said.

Online ticketing and registration platform company Brushfire said that deploying Square's in-app payments increased customer conversion of ticket purchases at local events by over 20%.

A catalyst

Square's newest SDK adds to a growing list of new products the company has launched recently that better position it to serve larger sellers. It launched a high-end point-of-sale product in late 2017 and a platform to help restaurants streamline front- and back-end operations last year. Now an in-app payment product makes the company's financial-technology ecosystem even more compelling to large sellers as it rounds out the Square's omnichannel payments platform, giving sellers an end-to-end payments experience from online to in-person.

It's no wonder Square is rapidly deploying products to help it attract more large sellers. Such sellers have been a significant boon for its business: Gross payment volume from sellers with over $125,000 in annual sales was up 41% year over year in the company's third quarter of 2018.

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Daniel Sparks owns shares of Square. The Motley Fool owns shares of and recommends Square. The Motley Fool has the following options: short January 2019 $80 calls on Square. The Motley Fool has a disclosure policy.