Square plans to roll out 30 new features using generative AI this year, as the company moves further beyond physical point-of-sale systems to expand its small business technology platform.
Joining the global fervour surrounding AI and its potential to turbocharge business efficiency, Square intends to introduce a fresh suite of AI-powered tools to Australian retailers this year.
Slated releases include automated product descriptions, which the company says are already utilised by US retailers, and a digital ‘photo studio’, allowing online merchants to seamlessly edit their product onto new backgrounds or environments.
Square’s global chief executive Alyssa Henry, who is visiting Australia this week, told SmartCompany those tools will do more than simply reduce the time entrepreneurs spend writing copy or editing visuals.
“The conversion rate goes up meaningfully when you have a professional looking photo, and when you have an SEO-optimised item description,” she said.
“There is a whole array range of things that we think we can do to basically give sellers expert assistance,” she continued, “because they’re not experts in SEO copy, or in photography, or in marketing, subject line email optimisation, all these things”.
The company is no stranger to artificial intelligence and machine learning, as those tech systems already power some of its customer messaging and business loan approval functions.
However, the “hype cycle” surrounding the latest developments in AI is valid, Henry said, given the “fundamentally better” performance of emerging platforms like ChatGPT4 compared to prior iterations.
“We’ve hit that kind of ‘Google’ moment” with AI chatbots, she said, reflecting on how the search engine titan both simplified and expanded access to the internet with its text box.
Square dove into the AI sandbox earlier this year with an in-house hackathon, where developers were tasked with finding new and creative ways the company could harness OpenAI functionality.
One working model was a digital ‘Dream Business Generator’, where Square users could enter prompts like ‘coffee shop’, ‘woodworking’, and ‘maker-space’, with the program then providing marketing keywords, artificially-generated imagery, and a mock business plan.
Henry toyed with the model herself, asking it to provide a business model for a Mexican-Canadian fusion restaurant.
However, Henry maintained the hack week was “just to get the juices flowing” for the AI products slated for rollout this year, with the ‘Dream Business Generator’ currently more ‘dream’ than ‘business’.
“In the fall, we’ll go through our annual planning cycle, so we’ll look at how things go next year, and I think we will dream even bigger then,” she said.
Such opportunities may arise from Square turning its existing AI systems into the vast data trove the company collects from its merchant network.
Henry said developers are considering ways to expand the AI functions tied to the Square Savings product it offers in the US.
New AI functions allow some of its American users to label and automatically partition funds that flow into a business bank account, with the goal of assisting those businesses with accounting and tax matters.
“What gets interesting is when we go talk to these customers, is they love the functionality, but they’re like, ‘Can you take it a step further?’” Henry said.
One proposal is an AI-powered ‘business coach’, capable of taking specific queries about savings rates and business strategy, and responding with tips drawn from the internet and data derived from other Square users.
Finding a way to “marry” those data points could result in a “super powerful” tool for small businesses, Henry said.
“We’ve done some early experiments with that,” she said.
“We’ve done some customer research, and it’s just really exciting.”
The company’s focus on AI technologies coincides with broader industry fervour, but it also comes as challengers in the payment space compete with Square’s classic point-of-sale offerings.
The emergence of Apple tap-to-pay acceptance is being keenly watched by Square, which maintains the product is complementary to its offerings, including Android payment acceptance.
At the same time, companies like Zeller — co-founded by Ben Pfisterer, Square’s former Australian chief — are fighting for small business market share against both Square and the Big Four banks.
As POS challenges mount, Square says the greatest growth in its Australian operations is coming via its software additions.
The company claims gross profit growth from its paid software and banking services outpaced overall gross profit in 2022, suggesting spending on its business solutions is performing well against fees accrued from Square transactions alone.
Its paid software gross profit also grew faster in Australia on a year-on-year than in any other of its mature markets, the company claims.
“We want to be great and competitive with payments hardware, with straight transaction speeds,” Henry said while pointing to Square’s broader tech platform as a driver of growth.
“Where we’re ahead in many ways is this integrated technology ecosystem,” she said.
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
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