On April 26, Square announced it's making another expansive play into a space that should have small business owners excited. Square is acquiring Weebly, a firm that offers a slick build-your-own website tool akin to Wix or Squarespace, in a cash and stock deal worth $365 million. The companies are excited to offer each other's services: you can bet your Weebly website will soon start offering simple payments integrations with square, complete with features like instant funding. Square will get a new value-add for business owners, the ability to cross-sell them website services.

The new business model seems similar to Shopify, which lets you build out an online store, process payments, and arrange for shipping items to your customer in one seamless online service. Shopify and services like it make selling online accessible to entrepreneurs without the need to be tech-savvy. And it's not just online businesses. Brick and mortar stores can gain a valuable side-business and build email and direct-mail mailing lists by selling Tshirts, stickers, and other goods online.

At Sherpio, we love seeing expansions like this because they give business owners more options to meet customers where they are and get value from their vendors. Square writes great software and does beautiful design, but here are some things we'll look out for as they start to compete against Shopify:

  • Rates: The deal was just disclosed, so we don't know how a combined payments + website product would be priced yet. Square normally charges 2.9% of your transaction + 30 cents for online charges. But most processing + site bundlers like Shopify and Volusion discount their transaction rates if you host a site with them. Square will need lower online rates to be competitive, at least for sellers with more than a few hundred dollars per month of online sales.
  • Shipping Integration: Shopify takes online orders and lets you print mailing labels automatically. It sounds simple, but a wealth of features in this area make customers happy— from partial refunds for shipping on returned orders to hand deliveries and using the right courier for the right address, there's a lot to execute properly in both payments and the cart experience.
  • Support: Square typically offers minimal support in payments, relying on simple technology and a tech-centric model to serve small customers. Clients will be spending more and entrusting Square with both their web presence and their money. Customers will expect prompt answers when things go wrong, so keep an eye on the customer reviews as the merger goes through.