Square is beloved by businesses because its hardware makes it a cinch for mom-and-pop shops to accept credit and debit cards. But the company’s efforts on the mobile payment front have been less successful, which is why Square just snagged delivery startup Caviar.
Like Postmates and Uber Rush, 2-year-old Caviar is an on-demand courier service, though unlike its competitors, the startup focuses on restaurant deliveries. Caviar caters specifically to sought-after eateries that otherwise wouldn’t offer delivery, like Mission Cantina in New York and Brenda’s French Soul Food in San Francisco—the kinds of restaurants that always have a line out the door. The startup charges a fee for its service, but recently dropped it from $9.99 to $4.99 as part of a new promotion.
Caviar co-founder and CEO Jason Wang said in a Monday blog post that Caviar will operate independently from Square for now, but Square could soon use the service to bolster its own new food-ordering app, Square Order. Square Order is like Seamless in that you can browse menus and pay for your food straight from the app, but Square doesn’t offer delivery, so you have to pick up your food when it’s ready. With Caviar’s roster of couriers at the ready, Square can take on the established players in the restaurant take-out space.
But the Seamless-GrubHub behemoth is already blanketing major metro areas with food delivery coverage, so what does Square have to offer? The company has one advantage in that it’s already integrated with more than 50,000 businesses who use Square Register, including some of the restaurants that have partnered with Caviar. The two could target an entirely different market than Seamless, one that’s a little pricier and a little more exclusive. Caviar also doesn’t have an app of its own, which is why selling to Square could be a compelling proposition.
Food is Square’s next big bet. The company first made at a run at mobile payments with Square Wallet, an app that alerted businesses when you walked in the door and let you pay with your phone. Then the company released Square Cash, which made it easier to transfer money to friends. But neither of those caught on—Wallet folded and became Square Order, while Cash is still chugging along but seems to have been handily beaten by Venmo.
If Square uses Caviar to create a high-end, on-demand delivery app, it wouldn’t even need to compete with Seamless—Square could define a niche.
This story, "How a Square-Caviar deal will bring fancy restaurants to your door" was originally published by TechHive.