|Stephen Mackey sits with his wife Shannon and mother Michelle at a picnic table overlooking Notaviva Vineyards in Purcellville.—Times Mirror Staff Photo/Ben Hancock|
“Do you guys take credit card?”
It's a question that's becoming less common in these digital times. The sheer ubiquity of credit cards and mobile payment options like PayPal or Google Wallet means that fewer people have cash on hand day-to-day.
One segment of the business community that has been slower to embrace digital currency is small business owners.
Enter Square, a mobile payment dongle that hooks into tablets and smartphones, which allows them to accept remote payment anywhere there is an Internet connection.
If you’ve been to a farmers' market or local coffee shop, you may have seen them.
Popularity has grown recently and sales on the service have raised to more than $15 billion a year, excluding a partnership Square has with Starbucks.
It is a service which is particularly well suited for certain small businesses that are transient, more rural or even just a single person venture, because the merchant isn't required to find an outlet for power or even a Wi-Fi connection if they are in an area with 3G or 4G coverage.
While sitting on a knoll overlooking a small pond and seven acres of grapevines on an unpaved rural stretch of Sagle Road in western Loudoun, Stephen Mackey explains how he started his winery and how integral the Square technology has been in growing his profits.
"We fancy ourselves more as a winery coffeehouse," Mackey said.
He and his wife Shannon decided to found Notaviva Vineyards “on a romantic whim" during a trip to Breaux Vineyards over a decade ago.
The two had just finished drinking some wine in a tasting tent, when she leaned over to him and asked, “Do people really do this for a living?”’
The response from Mackey was simple, “Do you want to?”
Two days later Mackey downloaded a PDF from Virginia Tech called the Economics of Wine Grape Production in Virginia. A week later the two found themselves on the 42-acres that is now Notaviva.
So how does a completely new business leverage new technology like Square and Twitter to grab an edge in an expanding market like Virginia wineries?
Mackey decided to start using Square after he saw other small businesses finding success with it.
Twitter founder Jack Dorsey brought Square to market in 2010 just four years after his popular social network started. Like most inventions, Square began with a question that needed answering.
How do traditionally cash-only businesses accept credit card payments? It was a question small business owners had been asking themselves for years.
The answer was something that had only recently become possible: smartphones and tablets. So Dorsey's friend and co-founder Jim McKelvey wrote the code for the new program and targeted usage of the new device to entrepreneurs and businesses.
The immediate concern for any business adopter of Square is cost.
Square’s rate is what Mackey calls “a very competitive” 2.75 percent flat rate per swipe. The flat rate was important because it allowed companies like his to now take American Express, a card he says is traditionally not excepted by smaller businesses because of high transaction fees.
Hardware for the Square system is cheap. Instead of stand that cost thousands of dollars per license, the Square System simply uses an iPad, iPhone or Android smartphone and most small business owners already own an iPad or smartphone.
And the Square dongle that fits into the audio jack is free.
Another plus is that the software is relatively easy to use, something for merchants and prospective purchasers that “can not be overstated,” according to Mackey.
He believes there is an easily explainable reason the technology will be easily digestible for everybody.
“It's not an accident that a lot of the layout and user interface aspects of square are very reminiscent of what we see in a lot of social media,” said Mackey.
Adoption of mobile-payment technology even for an older generation of users is mitigated by the familiarity people already have with similar software like Twitter or Facebook.
More than 70 percent of adults online in America use social media, according to Pew Research Institute.
Mobility is a huge impact of the new payment system. Mackey talks about a record setting weekend Notaviva had at a festival in Smith Mountain Lake. He was able to have multiple people taking orders through mobile payment on iPads.
Instead of having a bottlenecked line that drove customers away, they were able to service multiple areas of the festival and take many payments at a time.
Square also offers next day deposits, meaning the money Mackey makes over the weekend will be available to him on Monday morning, giving him one more day of productivity each week.
At the end of the day, Mackey uses the technology to keep business affairs separate from his personal life.
"Are you going to be staying up all night counting hand written receipts and doing data entry or are you going to spend 15 minutes pulling a report from a very efficient program, putting it in Quickbooks and going to bed?" Mackey asked.