Square has launched a free, standalone invoices app called Square Invoices in an interesting expansion of its portfolio. The payments platform already has a free point of sale app called Square POS and continues a disruptive push into the accounting software space for micro-businesses and new businesses.
The business model for Square is to give away free software as a way to increase the number of transactions moving through its payments platform. There are no monthly fees for Square Invoices, which works on iOS and Android. Users only pay for processing when they accept card payments – and they don’t pay any more than the standard rate of 2.2%. (There are no fees for cash.)
The invoicing app includes premium features found in paid accounting software. For example it includes automatic payment reminders (which Xero added in 2015), tracks payment status of each invoice (opened, overdue and paid), and can attach documents and receipts to invoices.
Here is a summary of the feature list:
- Sending quotes and allowing the customer to accept/decline
- Requesting deposits
- Issuing recurring invoices for instalment payments
- Store card on file for returning customers
- Set automatic payment reminders
- Add attachments and receipts
- Customise invoice appearance
- Accept payments online
- Track invoices and payment status
- Send and manage from desktop or app
It’s a clever move by Square. Even relatively new technology is becoming commoditised so quickly that it is now an incentive to use a payments platform rather than worth paying for in its own right. It also pressures the accounting apps.
Xero’s cheapest edition costs AUD$25 a month and is limited to sending five invoices. The next edition, with unlimited invoices, costs AUD$50 a month. And that doesn’t include a point-of-sale app or a payments platform.
Intuit’s QuickBooks Online costs AUD$10 a month for unlimited invoices and it also owns the payments platform. However, you will still need to buy a point-of-sale app.
The free software brigade is growing. Wave kicked it off with an ad-supported model, and there are signs that banks could release their own accounting software to improve retention.
Will Square release a basic accounting app? It clearly has the capability. Or will it keep releasing operational apps that plug into a basic ledger from an accounting software company?
The upshot is that Square’s strategy affects the top of the funnel for Xero and Intuit. Every business starts off small. A fast-growing business will quickly need something more robust than Square’s apps – but Square could have a big say in where they go next.
Square Invoices is interesting development and Square is one to watch.
The Square Invoices app is now available in Australia, the US, Canada, Japan and the UK via App Store or Google Play.
Image credit: Square