Credit Card Reader Square en Español

Skunk Works and Speed to Market

According to Reyes, there was no “tipping point” per se for the Spanish-language version of Square. There was always a consciousness that Hispanic businesses were important. However, Square, which still sees itself as a startup, had many other priorities in front of it before going after the Hispanic market.

Square’s Canadian launch pointed the company in the right direction. “The law requires products to be bilingual,” Reyes says, “and to enter the market properly, we had to localize both English and French.”

With the Canadian launch behind it and the constant questions from both the media and potential clients about a Spanish-language product, a “skunk works” of about five people was formed late in 2013 to address the issues of language (translation then localization), engineering and marketing.

Six or so months later, the product became a reality.

A Multi-Billion-Dollar Market Opportunity

For Square —a privately owned company that has processed about $15 billion in payments a scant five years after its launch—the Hispanic market opportunity is still miniscule.

Square’s volume among Hispanic businesses even before having the Spanish-language product was:

• Miami: $19.1 million
• Houston: $2.5 million
• Los Angeles: $4.3 million
• San Francisco: $1.5 million

 

But small businesses in general and Latino-owned businesses in particular represent a significant opportunity:

And the company sees a huge upside. A study by Geoscape (“Hispanic Businesses and Entrepreneurs Drive Growth in the New Economy,” Geoscape 2013) shows the scale of the opportunity:

• From 2002 to 2007, the number of Hispanic-owned businesses grew from 1.57 million to more than 2.26 million.
• Their revenues grew to more than $350 billion.
• Hispanic-owned businesses in the U.S. are projected to grow to more than 3.16 million this year, up nearly 40% since 2007.
• Projected revenues will exceed $468 Billion in 2013.
• The Latino share of new entrepreneurs increased from 10.5% in 1996 to 19.5% in 2012.

For a company processing $15 billion, even a 1% share of the Hispanic volume is significant; it would increase Square’s volume by 25%.

Language As a Factor

While some Hispanic business marketing experts point out that language isn’t an issue for all Hispanic-owned businesses, Geoscape research shows that:

• More than 57% of Hispanic business owners are bilingual and bi-cultural, fitting into Geoscape’s Hispanicity™ classifications HA2 through HA4. These entrepreneurs are shown to be comfortable in either English or Spanish and recognize both cultures.
• 15.7% of Hispanics can be categorized as “entrepreneurs.”
• 37.8% of Hispanic business owners belong to the “Americanizado,” or HA1.
• 26.1% belong to the “Hispano,” or HA4 segment.
• 28.5% of Hispanics who are self-employed belong to the “Americanizado,” or HA1 segment.
• 33.1% of Hispanics who are self-employed belong to the “Hispano,” or H4A segment.

(Note: Hispanicity segments are a proprietary metric developed by Geoscape. For additional details on Hispanicity segments, visit www.geoscape.com.)

Research points out that as Latino migrants settle in the United States, they tend to take the opportunity to start their own businesses rather than searching for employment with established firms.

Latino businesspeople—and especially Spanish-dominant ones—are important in precisely the type of segment that Square services: Small businesses that might not otherwise have access to credit-card processing.

The Latino Small Business

“Many Latino small business owners have their iPads, tablets and smartphone set in Spanish,” notes Reyes, “so the software had to accommodate to that. Also, among small and medium-sized business owners, there’s a huge amount of word of mouth.” So a Spanish-language Square product was not only needed, but would also have the “wow factor” needed to quickly gain traction.

Reyes also points out to two distinct growth areas:

“First, of course, is the small business that currently does not accept credit cards,” which can include restaurants, cafes, food trucks, taxis, and farmer’s markets, among other businesses. They all benefit from the increased sales that credit cards bring.

“But also, we will attract other kinds of businesses that currently accept credit cards but that find the process too complicated,” Reyes adds.

Credit-Card Acceptance As an Expansion Tool

The relationship between credit-card acceptance in higher unit sales is well-documented and accounts for the hefty fees that some merchant processors have charged in the past. After all, if you increase your unit sales an average of 20% to 30% per transaction, 4% of the total (plus sometimes other charges) doesn’t seem like a bad investment.

Reyes, however, mentions another significant benefit for Hispanic businesses. “Something we noticed is that the non-Latino customer would often be the one asking whether or not a business accepted credit cards. The absence of credit cards would then stop those sales,” Reyes says. “Accepting credit cards allows Latinos to expand their businesses from their current base into other groups.”

The Spanish-Language Product

In an effort to lower the barriers to Square, Reyes mentions a large list of tools that Square translated and localized into Spanish:

• Tools
• Dashboard
• Website
• Case histories and examples
• Videos (revised with Hispanic businesspeople and not simple translations of Square’s English-language videos)
• FAQs
• Support
• Call center

 

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In addition, there were several changes to the setup, including not asking for Social Security numbers, which is a sore point among many Hispanic businesses. “But we are not breaking any laws.” Reyes insists. “Whatever the IRS asks for, that’s what we ask for.”