The Bank of Queensland (BoQ) has inked a deal with Twitter founder Jack Dorsey’s payments company Square to retail the Square Reader terminal for contactless and chip payment cards to small businesses.
Pitched as a “ready to start working instantly” technology to entice SMB customers, the challenger institution will push the devices to new customers across its 180 branches within Australia.
The move towards heavily commoditised card acceptance facilities for sole trader and mobile small businesses builds on the growing rise of so-called ‘tradie tech’ that aims to secure immediate transactions by putting point-of-sale systems on the road.
While retailers like Officeworks already sell Square’s readers, the tie-up with BoQ is aimed to appeal because of shortened set-up times.
As a regionally-focused institution which uses a franchise model for its branch network, the deal with Square may also help BoQ augment new customer cashflow and potentially shrink outstanding receivables - a move that in turn could may shore-up credit quality.
Under the deal, Square will waive fees on the first $1000 in transaction volume for merchants. But after that Square will extract a flat rate of 1.9 percent for both credit and debit cards.
The tie-up with Square comes as many Australian retail institutions scramble to recast their merchant acceptance programs as the New Payments Platform, real time processing and interchange fee regulations take hold at the same time as online payment facilities and apps proliferate.
BOQ general manager for SME Banking, Greg Pink, said the Square partnership was an opportunity to offer its small business customers greater access to payment options when it comes to running their business.
“At BOQ we have a unique understanding of small business, with many of our branches run by small business owners. First and foremost, we're a relationship bank and we're focused on developing long lasting relationships with our customers to help them with all aspects of their business banking needs,” said Pink.
“Partnering with Square means we can offer a simple and more affordable card payment option to our small business customers, helping them to get up and running faster.”
Square’s Australian country manager, Ben Pfisterer, is clearly happy to have a retail banking backer, not surprising given current institutional appetites and backing for incumbents acceptance heavyweights eftpos and BPAY whose key backers are Australia’s banks.
“We’re excited to partner with BOQ, which understands the needs of small businesses and has a strong resonance within Australia’s business community,” said Pfisterer.