Square will no longer have a Round hole to fit in…

Not everything that crosses my mind has to do directly with photography.

Today is one of those days.

Apple just announced the new iPhone 7. One of the biggest changes to the new phones is the elimination of the headphone jack. The basic device connection interface that has been around since long before there were ever iPhones in the first place.

One of my immediate thoughts (after musing about how much I really dislike Bluetooth headphones to begin with) was: What about Square?

I have been a fan of Square since day one. I actually received their very first model of magstrip reader. Square is the company that allows Studio Orange to accept credit card payments to this day.

One of the things that made Square such a cool technology for small businesses is that it relied on ubiquitous technology for its basic magstrip reader. Every single device Square could interface with has a headphone jack.

This meant that Square did not have to rely on specific device standards.  It could make one reader compatible with just about everything.

This also meant that Square could keep the costs of its service low, and deliver its basic reader for free, making the service appealing and available to a huge range of small businesses, from coffee shops to crafters. The ability to accept credit card payments securely and easily has been a major advantage to many businesses, saving them from the hefty fees other companies not only charge for processing, but also to acquire their card reader devices and services (or even maintain landline or internet access to transmit payments — not necessary with Square, which can easily transmit payments via cellular networks).

Apple is now changing the game out from under Square, and other such card reader devices.

Yes, currently there will continue to be more Apple devices with a headphone jack than without, and currently the new iPhones (and presumably new iPads, if they take the same route) will offer an adapter… but one thing Apple does is never look back from a change. It stands to reason that they will work to completely phase headphone jacks out of all devices and rely solely on the proprietary Lightning connector from here on out.

This means that eventually Square will be forced to sign up for Apple’s MFi program (and pay any associated licensing fees) in order to create a reader compatible with Lightning connectors, and then offer two options: a universal (except Apple) reader, and a Lightning connector reader. The development and licensing costs alone will mean that Square will almost certainly no longer be able to offer free card readers, the very thing that has made them the industry standard for accepting mobile payments, and a favorite for small and micro businesses.

The alternative is that Square (and other companies) will simply have to ditch the heaphone jack magstrip reader entirely. Square already offers a wireless reader that accepts chipped cards and Apple pay, but at the cost of $50. They could also potentially go a Bluetooth route for their basic reader. But either way, there is almost no way going forward that Square will be able to offer an option to Apple users (possibly any users) that is free.

In one fell swoop, Apple has shaken up the small business world. Only time will tell whether or not this will negatively impact small business growth, or if it does, to what degree.

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2 Responses to “Square will no longer have a Round hole to fit in…”
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  1. I had this same thought as my wife relies on that card reader for her voice and piano studio. Thankfully, the Lightning to Headphone adapter included in the box of the iPhone 7 (and sold for $9 separately) allows the Square reader to still work.

    Source: http://www.macworld.com/article/3117649/hardware/dont-worry-squares-card-reader-works-with-apples-iphone-7-headphone-jack-adapter.html

    That said, we’ll eventually pick up the chip/NFC puck from Square as that is the way all payments are heading in the next few years. And since I work in the InfoSec field, I say good riddance to magstripe as it is a huge security hole for finances (not as bad as checks, though). But until that day comes, the trusty Square reader will work with the little adapter.

    • The other issue here is that this decision goes way beyond just card readers. Being the powerful market influence that they are, Apple has just forcibly changed the game for *ALL* companies relying on the standard headphone jack. Most notably, of course, headphone makers.

      The fact that Apple is offering an adapter with the iPhone 7 is clearly just a stopgap to stave off backlash. But if there’s one thing that goes 1000% against the design ethos of Apple, it’s the notion of any kind of adapter.

      It remains to be seen, but it would not surprise me at all if this were the only device going forward in which Apple includes the free adapter. In any case, it certainly won’t be an ongoing thing for long (in device cycle terms). Apple will do everything it can to discourage the use of the adapter — because it’s an ugly solution.

      But this poses a problem for a HUGE industry of devices, of which actual headphones are the lion’s share of that industry.

      Right now, Bluetooth isn’t magic. It isn’t even all that good. They keep promising the next iteration will only get better, but right now it’s only a promise. And when it works, it sucks battery life, which is no small issue, especially when it comes to power users, for whom the notion of a day without the need to recharge their phone is an amusing joke. Adding to the battery life frustration, if users want to go wireless, now they have one more thing to have to remember to charge. That’s one thing if you willingly buy into the Bluetooth ecosystem. It’s another to be shoved into it by your phone.

      And to not use Bluetooth? Good luck, because now you can choose to either use your attached device, or charge your phone. Not both. At least not until even UGLIER splitter adapters are available. Because Apple decided to further limit device ports on their device without even the common courtesy of introducing wireless charging to pick up the slack. I feel like Steve Jobs would be spinning in his grave at the notion of the inelegance of it all.

      But now all headphone makers will be faced with the decision to either invest in the necessary licensing to create a Lightning port solution for their headphones, go all in on Bluetooth, or simply ignore Apple altogether (or let customers go with Apple or other third party adapters).

      Whichever way they go, one thing is almost certain: the entire industry of headphones likely just got a little more pricey going forward for everyone.

 

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