Square clients experience brief outage

San Francisco payment processing company Square experienced a widespread service outage Thursday morning that impacted users’ ability to take electronic payments for a few hours.

While the problem was swiftly resolved, it underscored how much merchants rely on the 8-year-old company, and how it can inconvenience small businesses whose daily transactions may be few and far between.

“Even if (small businesses) are just losing a couple of transactions, that could be a huge deal,” said James Wester, a payments analyst with the research firm IDC. “Payments really do need to be 24/7 and be completely dependable.”

Square, which went public two years ago, allows businesses to accept credit card payments through a payment terminal or an attachment on smartphones. The service is commonly used by small businesses, or at places like food trucks and farmers’ markets that aren’t normally equipped to process credit card transactions.

The company, which was co-founded by Twitter CEO Jack Dorsey, experienced multiple outages of various Square services Thursday morning. It recommended that its clients switch to “offline mode” while the problem was being fixed, though many users were unable to access the feature if they were not already logged on to the app.

Jess McCarter, coowner of Easy Creole, a Berkeley restaurant, said he stores all of his business’ financial information on the Square website, which was also down Thursday morning.

He was working with his accountant to pull information from the website to prepare his yearly taxes when the site went down.

“Having all of your financial data in one place is great, but the downside is that once it goes down, you’re stuck until it’s working again,” McCarter said.

McCarter said his restaurant was able to process payments using Square by early afternoon.

Square said the outage was caused by a change it made to one of its back-end systems, which resulted in “capacity issues.”

“We take outages extremely seriously. Our sellers depend on Square to run their businesses, and we sincerely apologize for the disruption to both our sellers and their customers,” a spokeswoman said in a statement.

Square also had a significant outage in 2012, which caused problems for several hours. While an outage can be a costly inconvenience to merchants, Wester noted that it has not been a common occurrence for Square.

Square exists in the crowded marketplace of mobile payments, where volume has tripled since 2013 — reaching $10 billion in 2015. The market is expected to soar to $92 billion by 2019, according to a December report by Javelin Strategy & Research.

The company’s competitors include wellknown apps such as GooglePay and PayPal. Square recently began a partnership with Apple’s payment system, Apple Pay.

“If (outages) become something that happens a lot, then the merchants will find someone else,” Wester said.