The "Square Stand", a white, molded-plastic iPad holder that lets businesses accept credit cards with a mounted iPad and an integrated card reader, is pictured in this photo courtesy of Square Inc.Handout/Reuters
Square Inc., the mobile payments processing company founded by Twitter's Jack Dorsey, has snapped up Toronto-based payment startup Kili Technology.
It's the first Canadian acquisition by Square, which raised $150-million in October 2014 at a valuation of about $6-billion. Previously the company bought startups BookFresh and Caviar.
Kili makes point-of-sale hardware and software that supports both chip and pin credit and debit cards as well as near-field communication technologies found in mobile phones.
No terms were discussed, but Kili's 30-person team will stay right where they are.
"The team will continue operations in Toronto, Canada. Their headquarters will become our second office in the country, alongside our other office in Kitchener-Waterloo, Ontario, which we opened in the spring of 2014," wrote Jesse Dorogusker, Square's hardware lead, in a blog post.
In 2013, Kili spun out of authentication provider company SecureKey with co-founder Afshin Rezayee (he was SecureKey's VP of hardware). Kili received initial funding from Toronto-based Blue Sky Capital. SecureKey is backed by Rogers Ventures, and provides online authentication software for e-payments.
The first Square credit card reader, introduced five years ago, only required a simple swipe to authenticate. That technology has been widely discredited after high-profile hacks of customer payment credentials, including Target in 2013. Much of the U.S., however, hasn't adopted a higher standard. Even the new Square Stand, which turns an iPad into a cash register, doesn't support the higher chip-and-pin level of card security yet (there is an accessory coming soon for U.S. businesses). Kili's technology will be used to make Square's small and medium sized business transactions more secure.
Square processed $30-billion (U.S.) in transactions in 2014, up 50 per cent from 2013. Combined, all the U.S. sellers would qualify as the country's 13th largest retailer. There are 240,000 sellers signed up in Canada, three times the number from a year ago.
Shane Dingman