Square CEO Jack Dorsey not worried about Apple Pay

Square CEO Jack Dorsey says Apple's newly-announced mobile payment system, Apple Pay, is not a threat because his company's product isfundamentally different.

"It's not a threat because ... we don't build a credit card, we don't build a payment device at all," said Dorsey at the opening of Square's new Canadian office in Kitchener, Ont. on Wednesday.

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"They're building something that allows a credit card to be used in another place, but they're not building a terminal. We are a terminal, we a register andwe accept payments, so there's nothreat, there's no competition there at all," said Dorsey.

Apple Pay users willregister a card on their smartphone and then hold the phone close toa payment terminal using near-field communication (NFC) technology to make a payment. The service will be available for U.S. customers starting in October, whereretailers like Nike, Whole Foods and McDonalds have signed on. It's not yet clear when it might be available in Canada.

"NFCis not new technology," says Dorsey."It really hasn't taken off because there hasn't a huge consumer demand for it. We think Apple may change that."

Square has what it calls the Square register, which includes an app foriOSand Android and a card reader. Unlike Apple Pay, usersswipe their credit cards atterminals installed byretailers on mobile devices.

Square charges retailers 2.75 per cent of the value of purchasefor every cardswipe, and promises the payment will be deposited in two business days. Currently in Canadathe interchange fees charged to merchants for credit card transactions are between 1 per cent and 4 per cent per transaction, though the federal government is seeking to lower those fees.

However Dorsey seemed open to making Apple Pay work with Square systems.

"We're building a register so that sellers can accept a credit card, so they can accept cash, so they can accept a cheque, so they can acceptBitcoinand so they can accept any form of payment that comes across the counter including future ones and burgeoning ones like Apple Pay," said Dorsey.

Interestingly, Apple Pay will be available at Whole Foods locations across the U.S., where Square already has registers set up. Square also has partnerships withthe chocolate company Godiva, and clothing companiesUniqloand Burberryin the United States use Square.

Square Wallet app is now Square Order

However, Square did have amobile payments app called Square Wallet that the company pulled from app stores in May.

"We don't believe that's enough utility, we don't believe that it's actually enough for people to do it again and again, we don't believe there's enough value in terms of speedor convenience over just swiping a card," said Dorsey of the Wallet app.

Instead, the company launched Square Order, which is currently only available in the U.S.

"It not only allows you to open a tab remotely, it allows you to place an order," explains Dorsey. Users of the app can pre-pay and pre-orderfood and when they show up at the coffee shop or sandwich place, it's all ready to go.