While Canadian small business has been slow to adopt new tech, Square Canada is betting big that Trump tariffs and recent economic chaos might just be the challenge that sparks a drive to digital.
Canadian productivity lags G7 peers — especially the U.S. — with a lack of tech adoption seen as a main culprit.
Just as the COVID crisis inspired consumers to make the leap into digital transactions, Square Canada’s Go To Market Lead Steve Kelly believes these new challenges will do the same for its businesses.
“We’re excited to make big investments this year, and the following year,” he says. “We see an opportunity to more than double our position in Canada over the next three years.”
Most Canadians interact with Square products and services daily — whether they’re aware of it or not. That’s because the financial services and payments company is used by hundreds of thousands of Canadian merchants.
Founded in 2009 by Twitter co-founder Jack Dorsey, Square is estimated to operate about 28 per cent of all digital point-of-sale solutions worldwide. It’s parent company, Block, meanwhile, occupies the 186th position on the Fortune 500.
Though the company is now huge, it remains laser-focussed on small businessoffering solutions to help independent contractors, food service operators and small vendors process digital payments — and manage operations.
“As a Torontonian,” says Kelly, “you probably run into one of the many restaurants running on Square for your morning coffee, or your lunch salad, or your afternoon treat.”
The Fredericton, N.B., native says he learned first-hand about the inefficiencies of small business while working for a hockey shop as a teen in Markham.
His fascination with business and a love of the Maritimes ultimately led to pursuit of a commerce degree at St. Mary’s University in Halifax, before returning to the GTA and a job at Bell in 2005.
While working for Virgin mobile in marketing, Kelly became fascinated with startups, eventually co-founding data encryption venture, SurfEasy, in 2011. After that company was sold to Opera Software in 2016 Kelly joined longtime tech peers at food ordering startup Ritual, before taking the top job at Square Canada last July.
Kelly spoke to the Star from his home office in Oakville about the company’s ambitious growth plans for the Canadian market, why Square is confident Canadian business owners are ready to go digital en masse, and why cash is no longer king.
Were you always interested in small business operations?
My first job ever as a teenager was at a hockey shop sharpening skates and selling bikes in the summer for the two owners. I remember how hard it was for them to stay on top of ordering more merchandise for the store, understanding what was sold yesterday, and reconciling their cash on hand with credit card receipts.
It struck me how much time they couldn’t spend with customers or even with their families, because of how hard it was to run that small shop.
Do a lot of Canadian small businesses still run that way?
There are similarities. Obviously, there’s less cash now and more card transactions, but they still may not know what was sold that day, how much was sold last week, and struggle to reconcile it with the amount in their account. We see disconnected systems within these small businesses and realize there’s much more efficient ways for them to have access to that information.
Is that the opportunity Square sees for the Canadian market?
Square is investing a lot in Canada, and most of my role is focused on how we deploy this investment toward growth. We’re growing our sales, our customer support and account management teams, and our partnerships and our marketing investments across Canada. We see an opportunity to more than double our position in Canada over the next three years.
Why now?
Because so many businesses in Canada are still using these legacy services that don’t speak to each other. We recently ran a study which found that 89 per cent of Canadian restaurant operators plan to invest in technology to improve their business this year, and two-thirds believe technologies like AI and automation will improve their operations.
We also saw our gross payment volumes increase by double digits last year compared to 2023, so we know the opportunity is there.
It’s always a good time for businesses to consider ways to use technology to reach more customers, grow sales, or lower operating expenses — but especially when things are a little more uncertain.
Why have Canadian small businesses been slow to adopt new technologies?
I’m not sure why it’s historically been the case.
Our ability to get in front of merchants and explain it to them is a big part of it, which is why we’re investing so much in sales and marketing; to educate small businesses about what these modern tools can do for them in terms of streamlining their operations, hopefully saving them money on labour and inventory management, or offering access to capital.
But we do see the adoption in big numbers among new business openings, so perhaps it’s more of a timing scenario. Businesses are starting to upgrade what they have and are perhaps just becoming more aware of how much more powerful these modern solutions can be.
What kind of solutions?
We offer beautifully designed point-of-sale hardware solutions, like payment terminals and ordering kiosks, as well as software applications that help our sellers run their business.
Last year we added tap-to-pay for iPhones — having already done so for Android in 2023 — where merchants just have to download the Square app to their phone, and within minutes have the ability to accept payments on the go. That replaces the need for any external device, and we immediately saw a significant explosion in demand.
There are many kinds of smaller sellers that are using square to run their business, whether it’s a service professional like a plumber or contractor looking for a payment following a job, health and beauty service professionals, or kiosks at farmers markets.
And obviously online has become a huge part of the way even in-person merchants now run their businesses, whether you’re a restaurant offering takeout or a salon selling beauty products on your website. We’re helping our merchants sell across in-store and online marketplaces and manage it all in one place.
Another exciting one we introduced last year was our Kiosk, further helping our merchants sell more inside their four walls, in a way that helps operation run smoother, and helps them save time and money on labour. Since launching Square Kiosk in Canada in October users have seen a 30 per cent increase in order volume.
So, you can imagine a larger restaurant that has walk-up orders, orders off their website, from third party marketplaces like Door Dash and Uber that have direct integrations into Square — maybe they have kiosks in their store, or a hand-held for a pop-up location they run on weekends. Having this single source of information across all sales, knowing where the order originated from, how much was sold — that can be powerful in terms of how they plan and operate their business.
Our sellers often start with getting their sales and payments all in one place and expand their use of our products to solve other problems.
We have specific software applications that help them track inventory and staffing hours better, giving their accounting teams and bookkeepers easier access to financial data, and aggregating their sales information across channels.
Additionally, Square operates its own financial services arm here in Canada, so using this information we can provide loans and capital for small businesses that otherwise wouldn’t get them without a lengthy application process — or at all.
We can do it because we can access information that allows us to make those decisions quickly and help them smooth out cash flow cycles or make that next purchase of inventory from a supplier or take advantage of a new location lease.
What do you say to Canadians who are hesitant to do business with an American-owned organization right now?
I would say Square Canada is an Ontario-based corporation, we’ve been in Canada for over 10 years, employing Canadians and really building products and services to help Canadian small businesses operate better and sell their products. We are very focused on the growth of our team and are looking to employ more Canadians and support our sellers in Canada even more.
What do you see as the future of payments? Is cash becoming obsolete?
More than 85 per cent of transactions that our merchants process is on cards today, and so the question is, how much of that remaining number will cash ultimately represent — over time?
I’m not sure, but consumers are clearly opting to pay with their cards and mobile wallets, and merchants are really benefiting from the ability to digitize all these transactions.
It’s helping them shore up their finances, and access funds immediately in secured accounts.
Digital payments are certainty something both consumers and merchants are choosing as the preferred path forward, so I would expect that trend to continue.
