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With New Food App Square Order, Square Wants A Bigger Bite Of The Restaurant Industry

TechCrunch logo TechCrunch 12/05/2014 Ingrid Lunden

, by many , is hungrily in search of to feed its expanding ambitions in e-commerce, and today we are getting another glimpse of where that strategy is taking it. The company has launched a new mobile app called , which lets you order from nearby eateries, pay for it, and then get a ping when it is ready for collection.

And this may be just the appetiser for a bigger meal. TechCrunch understands from a reliable source that Square was a “serious bidder” against Google for , a restaurant website building platform Google . Ultimately, Appetas (which is closing down as its founders move to Google in Mountain View), opted for Google “mainly due to the close alignment of direction for the technology and the space,” according to our source.

In this vein, it’s not clear whether Square Order is based on tech that Square has built in-house, or whether it is part of another acquisition, or whether the company is working with a third party.

By coincidence, there is another alongside Square that has built the same type of service. , as the app and startup are called, has up to now focused only on extending its service out to college campuses. Others that compete in this space include , and even .

We have reached out to the companies with questions and will update as we learn more.

Regardless of whether Square has built Square Order itself or sourced it from elsewhere, the fact that it has launched the app, and has been eyeing up buying food-realated startups, is a sign of where food services are fitting in for Square as a business.

First, there is the competitive threat. Some mobile commerce players (like ) may be looking just to make the mobile commerce experience better and more widely used. But other rivals in the mobile/local commerce space like Groupon have also been making large food inroads by catering (pun!) specifically to restaurants and cafes — this strategy was behind Groupon’s acquisition, integration and . (Groupon, by the way, was another serious bidder for Appetas, as was GoDaddy — really a sign of how Appetas’ fate could have gone is some radically different directions.)

PayPal also has been expanding its services in the area of restaurants, where you can now pay for your meal , for example (that’s for eating-in though).

Second, there is the promise of business in this vertical. While many people may not make daily trips to buy clothes (okay, some do) or other products, there is something more habitual about food.

Think here about the daily trip to pick up your lunch while at work, or a coffee and bagel in the morning, or grabbing take out on your way home at night. In other words, if you tap into the right places and the right experience, you can find yourself in the midst of a decent and regular revenue stream.

“Restaurant tech space is heating up and I think having a strong SMB sales presence is huge,” our source notes.

While Square has already made a lot of headway with local merchants adopting its point-of-sales services like its smartphone- and tablet-integrated dongles, or its Register product, this extends those services out to cover more online opportunities carrying over into the offline world, similar to what Square has done with the Square Market, but now for a more perishable, service-based commodity.

Its interest in Appetas follows this logic, too: Square doesn’t just want to be grabbing transaction dollars, but building solid relationships that can then be used as a more natural, and maybe inevitable, extension into wider revenue streams.

Square Order is kicking off with services in New York and San Francisco, with an app already available on , and an currently in beta (both first spotted by ). The company is giving users the ability to log in and request their own restaurants and even cities for where the service should go next. Indeed, if it hopes to be truly useful, scale and choice will need to be of the essence.

(Is it just a basic default, or a sign of things to come, I wonder, that the Square Order app notes “English, Basque, Chinese, Czech, Dutch, Finnish, French, German, Italian, Japanese, Korean, Norwegian, Polish, Portuguese, Russian, Slovak, Spanish, Swedish, Vietnamese” among the languages supported?)

Square Order will also give Square a chance to leverage some of the other e-commerce infrastructure that it is putting in place — specifically around the area of logistics and fulfillment. Square has integrated its  into the Square Dashboard, where Square Merchants can enable pickups, just as they enable shipping orders. What this means is that a service like pickup can potentially be used for all kinds of products, not just food.

As for commissions, it looks like Square is initially taking a cut on Square Order based on its , which gets applied to the total amount of each pickup sale “for a limited time, until July 1st, 2014.” After then, Square says the fee will go up to 8% per pickup order. It’s not clear whether that fee is instead of, or on top of, any payment processing

Here is how Square for Square Order:

  1. Browse the list merchants near you from the home screen.
  2. Tap a business listing to view business details and their pickup menu.
  3. Tap a business listing to view business details and their pickup menu.
  4. Tap an item to view descriptions and select from available modifiers.
  5. If you’d like to include a note to the merchant, use the “Add a note” option at the bottom of the screen.
  6. To add an item to your order, tap “Add to Order.”
  7. To edit or complete your order, tap View Order.
  8. If the merchant is accepting tips, one will be automatically applied to your pickup order. Tap the tip line to modify the amount.
  9. When you’re ready, select Place Order. Your linked payment card will be automatically charged.

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