Over the past year, payments technology company Square has achieved some success in expanding beyond its roots in selling credit card readers. It has moved aggressively into selling software to merchants to help them run their businesses.
Square’s business invoicing software, in particular, is seeing strong demand, according to the company. The software lets merchants send invoices from Square’s mobile app to clients as a bill to be paid. Clients can then pay the merchant directly through the app by inputing their credit card or debit card information.
On Wednesday, Square said that it has processed over $2 billion in paid invoices since the service premiered in 2014, making invoicing one of the company’s fastest growing software services. Meanwhile, the number of sellers using the service has nearly doubled over the past year, according to the company. Square also debuted a new feature that lets merchants send invoices at scheduled times.
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Founded by Twitter CEO Jack Dorsey, Square debuted in 2010 as a way to let anyone accept credit card payments by plugging a square dongle into their iPhone. The company went public in late 2015, has since expanded its business beyond just mobile payments to offer a variety of paid services to its millions of business users.
In the first quarter, Square’s revenue from invoicing software, loans, and marketing services rose 179% to $24 million. Square makes money from invoicing by charging merchants 2.75% of the amount of each invoice they send.
That revenue is still tiny compared to the company’s core credit card processing and payments business, which accounted for $300 million in sales in the first quarter, up 42% from the same period last year.
But for Square, the software and data services revenue isn’t just growing quickly, it’s also growing more quickly than the company’s original business and opens the door to selling more paid services on top of payments.
Square faces competition in invoicing software from services like Intuit’s Quickbooks, which has a much larger user base, and PayPal.
Square’s sales pitch for its invoice software is that it gives merchants the ability to see a comprehensive view of their revenue. Merchants that use both the credit card swiping service as well as invoices can see the percentage of business coming from each source, explained Mike Cieri, product lead for services at Square. That gives merchants a more complete picture of where their revenue is coming from so they can make better business decisions.