Square retools consumer mobile payments, replacing Wallet with a new app called Order

Square has launched a new payments app called Order that will eventually replace Wallet on smartphones. The app carries a lot of the same functions as Wallet, but instead of focusing on the in-store check-in and payment, Order is geared toward ordering food, coffee and goods ahead of time, allowing customers to skip lines and avoid waits when they arrive at a restaurant or store.

Order is going live with merchants in San Francisco and New York first and is available first on the iPhone(s AAPL) and soon on Android(s GOOG), but a Square spokeswoman Semonti Stephens confirmed to me that the plan is to eventually roll out Order nationwide. While Wallet is no longer available in the app stores, Square will continue to support the apps already installed.

Square Order screenshot

While Wallet was one of Square’s first products apart from its now iconic Reader, it never got the takeup Square was expecting. As with most digital wallets, few consumers saw any advantage in paying with a smartphone when they could just as easily swipe their plastic at the sales counter.

The one feature that consumers did like, however, was the ability to “pay with your name” without having to interact with the register or point-of-sale equipment in any way, Stephens said. So Square decided to retool the technology to allow customers to pay for their food or goods anywhere, rather than only in the store, and then pick up their orders at their convenience.

While Square is focusing on food pickup – a market dominated by big online ordering companies like GrubHub – it’s intended to support any kind of order-ahead transaction. According to Square, you can pay for a whole dine-in meal ahead of time — including tip — so you merely have to show up, sit down and be served. And while restaurants and cafes are the main targets, it could be used to pay for any good or service — whether it’s a manicure or a garden hose – in store. Square is removing the need for physical presence in the store from the wallet, but that doesn’t mean you can’t conduct a transaction while on premises.

Square Market's new Pickup feature (Source: Square)

Square Market’s new Pickup feature (Source: Square)

Square actually started down this road last month when it launched its Pickup feature for Square Market, which lets customers pay for items in advance from a merchant’s web or mobile portal. The difference between the two is in how they’re used. Pickup might be useful for someone going directly to a restaurant’s webpage for pre-ordering or reserving a turkey from a local butcher. But Order is designed to be location-aware, scanning neighborhoods for local coffee shops or cafes for customers who habitually order from the same places.

Pickup’s same pre-ordering fees will apply to Order, though. Instead of Square’s usual 2.75 percent flat credit card transaction charge, Order will carry an 8 percent fee for the merchant (though Square is offering a promotional rate of 2.75 percent until July 1). Square says that 8 percent rate is still competitive with online food ordering services like GrubHub.