Square launches gift cards (opens in new tab)

This would have been nicer had it launched about 3 weeks ago. Square-wallet gift cards would be great easy holiday gifts.

(it also seemed like an obvious feature ever since Square launched. Running loyalty and gift cards is one of the ways to get out of the 1-2% gross margin ghetto for just processing visa/mc, which is one of the big problems with a payments startup. Even if you process hundreds of millions of dollars in transactions, it's hard to make enough from the fraction of a percent left over after variable costs to cover your fixed costs, let alone turn a profit. Yet, even on day one, you need huge scale and high reliability.)

Gift cards as generally implemented today are awful. You pay for something now that often doesn't get used for a long time. In lots of cases gift cards don't get used at all. IIRC it's something like 25% of the time. It might be a bit less with digital cards that you can't lose, but it'll still be significant. It's disappointing that Square's offering doesn't adress this core deficiency.

It's Apple's Passbook but explained right. Good job.