Why Square is Selling Through Apple at a Loss

Jack Dorsey’s mobile payment play, Square, recently announced that it will begin retailing through Apple’s online and brick and mortar stores.

This afternoon Dorsey tweeted out, “If you want a free reader mailed to you, download the @Square app. If you want one now, check if your local Apple store has it in stock.”

For anyone not willing to wait on the mail, the Square card is selling at Apple for $9.95. That’s a big difference from offering the device for free. But it probably won’t be putting any cash in the company’s pocket. Square is offering a $10 credit with each purchase. Since it is sharing the retail revenue with Apple, Square is probably taking a bigger loss on these retail transactions than the units they ship for free.

The hope is that the increased visibility from Apple will help Square get to widespread adoption before other players in the mobile payments game. One big boost is that Apple can offer in store demos and classes on Square, giving nervous merchants a chance to spend some time hands on with the product.

On the flipside, the Apple store is mostly about consumer electronics, not devices for small business.


  Why Square is Selling Through Apple at a Loss