Square, moving to lower friction in the payments space, has launched a business-based version of its person-to-person Square Cash service that lets businesses accept digital payments. Square Cash’s move includes the rollout of $Cashtags, a unique identifier that enables anyone to create a personalized name like $ErinHills or $SunsetPhotography and get paid privately and securely through Square Cash.

“Mobile payments seem to be finally ready to fly,” said Wilson Kerr, vice president of business development and sales for Unbound Commerce, Boston. “Square is clearly trying to leverage the social media angle with Cashtags versus hashtags, to allow business-to-business payments.”

End to end
Businesses can avoid having to deal with credit card fees by using Square Cash for 1.5 percent per transaction. The system, which currently works with debit cards only, could help jump-start the slow pace of mobile payments adoption following the rollout of Apple Pay.

Promoting Square Cash for businesses.

With Square Cash now available for businesses everywhere in the United States, businesses of all stripes can receive deposit payments directly into a bank account, as opposed to a holding account, while paying an affordable rate.

$Cashtags can be posted anywhere to let people know they can pay the business with Square Cash, either from the Cash app or on the Web.

Reflecting the service’s strong mobile character, a Square Cash release said many artists, musicians and social media stars now accept payments with their $Cashtags.

Curtis Kulig, a New York-based artist known for his ‘Love Me’ campaign, uses $LoveMe to fund new public art projects. Joy Cho, an avid Pinterest user and designer with over 13 million followers, uses $OhJoy to accept payments from her various clients.

Nonprofit organizations such as Wikipedia ($Wikipedia), (RED) ($RED), Khan Academy ($KhanAcademy),The USO ($USO) and The Bay Area’s KQED ($KQED) are using $Cashtags in fundraising.

Payments evolve
In October 2013, Square launched a consumer-facing person-to-person service called Square Cash that leveraged an email address to let consumers send funds to friends and family and included a mobile app component that simply sends an email.

Accelerating slow adoption of mobile payments.

As the service grew, it was likely that the app would integrate with some of Square’s other services to create an end-to-end mobile payment offering for both consumers and merchants.

Square Cash grew out of a resolve to provide a more convenient option amid the overwhelming number of person-to-person mobile payment options available to consumers.

The service went head-to-head with PayPal and branded apps from well-established financial institutions including Chase and Bank of America.

Despite the introduction of Apple Pay and growing media focus on mobile payments, consumer interest in mobile payments did not grow very much between December 2013 and 2014, according to recent research from 451 Research.

The report, “Security, convenience and acceptance predicate mobile payment adoption,” found that the number of consumers likely to make mobile payments increased just 2 points over 2014 for a total of 24 percent. The lack of a mobile alternative that is better than current payment mechanisms based on consumer interest in security, ease of use and wide acceptance is the root cause of low consumer adoption for mobile payments, per the report.

Security concerns
Data showed that 84 percent of consumers named security as one of the most important factors in a mobile payments app. Ease of use was named by 66 percent while 64 percent pointed to widespread acceptance.

Eliminating payment complexity for all businesses.

Nevertheless, the mobile payments space continues to heat up as handset manufacturers, financial solution providers and others look to shore up their own piece of the action.

“The use of a sign or symbol that shows that you take payments this way on a site, is smart,” Mr. Kerr said. “Now that Apple Pay has normalized mobile payments, the foot race is on, to gain traction and relevance, all for a percentage of transactions.”

Final Take
Michael Barris is staff reporter on Mobile Commerce Daily, New York