Square links in-store shopping to its online Market with new order-ahead tool

Square has launched a new pre-ordering feature that lets small businesses offer up their wares to customers for online ordering and subsequent in-store pick up. This kind of order-ahead feature is becoming common in all manner of mobile payments systems, and it ties together two facets of Square’s business: its established in-store point-of-sale operations and its new online shopping portal Square Market.
Square launched Market in June as a tool for merchants to set up e-commerce operations, but the number of Square’s Reader and Stand customers using Market for online shipping remains small. Either its small business customers aren’t equipped for or interested in shipping their goods, or they’re already using a competing e-commerce system. As of October, Square had 500,000 merchants with storefronts on Market, but the majority of them were using its tools to display their goods online rather than actually sell them through the browser.

Square's Pickup interface (source: Square)

Square’s Pickup interface (source: Square)

The pre-ordering system, called Pickup, could give businesses the nudge they need to start accepting payments through Market, allowing them to lock down sales before a customer ever enters a store or accept pre-orders for hot or seasonal items that might normally sell out. Square also believes that the feature will be particularly popular with restaurants and coffee shops, since their customers could avoid waits or skip lines when they arrive at their businesses. Pickup could open Square up to the online takeout ordering market, dominated by companies like GrubHub.
Pickup integrates directly with Square’s point-of-sale software Register so merchants can process and track regular sales and in-store or pre-order sales in the same interface. But it’s not cheap. Square plans to charge an 8 percent processing fee on pre-orders from Square Market, though to encourage businesses to try out the service it’s only charging its regular 2.75 percent transaction fees until July 1.
Square Reader Gen 4Square also revealed on Tuesday that it has updated its point-of-sale system with a few other new features. Most notably, Square will now process payments offline when there’s no internet connection available. The Register iPhone or iPad app will store card and signature information until a connection is re-established and then process the order, though the merchant risks a card being declined after the sale.
Register and Market are also getting a new inventory tracking system, which many merchants have requested, Square said. The system will allow businesses to monitor changing stock levels adjusted for both in-store and online sales and set up alerts when they’re getting low on particular items.