Square Inc.’s hardware chief Jesse Dorogusker is “kind of obsessed” with a metric that doesn’t appear anywhere on the company’s financial statements.
For the past few years, Dorogusker and his team have been determined to reduce the amount of time it takes to process chip cards. They’re now focused on cutting down checkout time more broadly, by looking at other aspects of the buying process.
Square
SQ, -4.08%
announced Wednesday that it had hit a new milestone, as it can now process chip cards in two seconds. (Bloomberg reported early on in the chip-card transition that the new cards added seven or eight seconds to overall processing time.) Square also plans to eliminate the signature requirement for merchants, which will shave a few more seconds off of the overall process.
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The payment experience for customers has “regressed” since the introduction of chip cards, Dorogusker told MarketWatch. “People have started to forget how smooth and simple it was to hand over your card and have the seller swipe it through a dinosaur terminal.”
Chip cards have little circuits that help make your payment information less susceptible to fraud, but they’ve also added back seconds to the process of checking out.
Square was able to drive down chip-card speeds in this latest instance by working with the various credit-card companies. Visa Inc.
V, -0.78%
touts its Quick Chip technology, which allows consumers to dip and remove their chip cards before the cashier is done ringing everything up and can take “about two seconds or less.” Mastercard Inc.
MA, -1.93%
has a similar technology called M/Chip Fast, which “effectively prioritizes the parts of transactions that are critical to security.”
The technology isn’t limited to Square, but Dorogusker is expecting that the company is well-positioned to capitalize on it, relative to legacy peers, because the company has “ownership” over its entire system. Chip technology is “relatively chatty,” he said, meaning that there’s a lot of communication that has to take place between the various hardware and software employed in a transaction. Those conversations can take longer between products that weren’t all made by the same company or that were made years ago.
Whether chip speeds matter from a business point of view remains unknown. Theoretically, the ability to process transactions quickly could be a competitive advantage for Square and others with fast processing times. Consumers are still “whining” online about the behavior of chip card, Dorogusker said. Merchants may be looking for ways to reduce wait time or shorten lines.
The company faces some competition on this front. First Data Corp.
FDC, -1.34%
said last year that its Clover product could process chip cards in under three seconds.
Square shares are down 4.5% in Wednesday’s session but up 194% over the past 12 months. The S&P 500
SPX, -0.86%
has gained 14% in that time.
Source : MTV
