Jack Dorsey's mobile-payment startup Square, one of Fast Company's 50 Most Innovative Companies, is now processing $4 billion in annualized payments. So it's no wonder why competition to its Square device, which turns any iPad or iPhone into a credit-card reader, is fast heating up. Alternatives are popping up all over the market, including Intuit's GoPayment and PayPal Here, which launched last week.
Today, Eventbrite, the online ticketing startup, got terrestrial too. It's launched the At The Door Card Reader, a credit-card swiping accessory for the iPad that enables merchants to sell tickets, merchandise, drinks, and more on-site. Until now, Eventbrite has focused on pre-sale online transactions. But since a significant number of event attendees are still purchasing tickets at the door, the company figured out a way to tap into that market--without help from Square or another solution.
Last month, Eventbrite issued its 50 millionth ticket, a tally that not only mirrors its rocketing growth--revenue doubled in 2011--but also perfectly matches the $50 million in VC funding the company raised last May. The company charges a $0.99 processing fee and takes a 2.5% cut of each ticket sold, rates that will eventually transfer over to sales from its card reader.
"In talking to our event organizers, we realized there was a huge unmet need at the door, on the day of events," says Tamara Mendelsohn, VP of marketing. "In the case of many events, event organizers are seeing half or more than half of their attendees showing up at the door to buy tickets." The strategy will open up new revenue streams from up-selling merchandise, food, and drinks to customers in-person when they purchase tickets.
So why didn't Eventbrite take advantage of a solution like Square? "Square does not have an open API," Mendelsohn says. "The real value of the solution is the ability to pass data back into the Eventbrite's management console and reporting. So if you are using a device like Square, you wouldn't be able to capture all that attendee information and marry it back into our dashboard."
It's unclear when Square will open up its platform to third parties like Eventbrite. Though we've seen some custom-built platforms--such as the Obama and Romney campaign Square apps--third-party integration thus far seems to be done on a one-off basis. And while many of Eventbrite's merchant partners are taking advantage of Square and Intuit's GoPayment solutions already, Eventbrite couldn't integrate either of those systems with its platform. "Our vision is to offer one holistic picture of the full performance of an event," Mendelsohn says. "Who came? When did they show up? Where did they buy their ticket?"
Mendelsohn refers to Eventbrite's solution as an "alternative" to Square rather than a "competitor." It's not likely Eventbrite's aim here is to take on PayPal, Intuit, or Square, just as it's unlikely for these financial services companies to enter the online-ticketing game. But rather than wait for these services to open up their platforms, Eventbrite decided to strike out on its own.
Arguably, it's less expensive for Eventbrite to create its own hardware--an orange, flimsy piece of plastic that, like Square, is free for merchants to use--than it would be for the company to adopt Square, and lose access to the valuable data it's been collecting online. And the longer third parties must wait for an open Square API, the more likely it might become for other startups to forgo Square's solution in favor of producing their own solution or opting for an alternative.
"At the end of the day, we're technology agnostic," Mendelsohn says. "If they open up their APIs, we'd love to work with them, just as we do online, where we accept payments via PayPal, Google Checkout, or our credit card processing."
[Image: Flickr user John Davey]