Square beefed up its payment system, Square Cash, today with a feature designed to make it easier for anyone to accept payments, and also opened its doors to businesses. It's a good update, with some very nice features — it makes collecting money really easy — but it has a tough fight ahead of it.
Peer-to-peer mobile payments are cluttered. Facebook is doing them. Google is doing them. Hell, even Snapchat is doing them — although, in fairness, that's built on top of Square Cash). But Paypal-owned Venmo has all the real momentum. Venmo is a viral hit with younger people who use it to seamlessly send money back and forth, so much so that it's already well on its way to becoming a verb that means "pay." Cash needed something to fight that momentum, and its new release has its own viral component to it, and also introduces what Square must be hoping becomes an even more commonly used word.
One of the main pieces of today's announcement is the cash tag, or, uh, $Cashtag. $Cashtags (I'm sorry!) are designed to give people ways to accept Square Cash payments out in the physical world as well as online, while simultaneously marketing their brand.
Essentially, it's just a username that points to an account at www.cash.me. For example, the artist Curtis Kulig uses the Cashtag $LoveMe, which not only lets anyone who uses the Square Cash app pay him with his username, but also lets him take a payment from anyone who goes to www.cash.me/$LoveMe and enters a debit card number.
It's an instant transaction, where money is transferred immediately between banks instead of being held in a repository, and is free for individuals. (Businesses will pay 1.5%.) It's nice.
Yet while Cashtags are novel and interesting, they will be a little confusing until and unless they catch on. Square is billing the tags as a way for people and businesses to market themselves and create a public-facing address to accept payments. Yet, if people do market their Cashtags, obviously they will also be marketing Square Cash itself. That way, when people see one in the wild, they immediately think, That is a way to transfer money, rather than "A$AP Rocky mishap," or just "WTF." Square is envisioning a world where people will eventually use Cashtags in YouTube videos, on Medium posts, even on business cards and promotional materials.
But getting to that point will require some real education and promotion. Square has a few nonprofits on board using the tags as a way to fundraise — similar to the way one might use an SMS short code, including Wikipedia and Project (RED). Whether or not Cashtags take off will depend largely on how much these services, high profile individuals individuals, and its rank and file user base, aggressively use the tags.