What Square’s Partnership With Codebase Means For British Start-Ups

On Tuesday, Jack Dorsey’s Square (now Block) announced a new partnership with Codebase aimed at empowering Codebase entrepreneurs to scale up their start-ups using the wide range of Square’s payments processing solutions.

Block offers individuals, retail and commercial clients the power to sell their products in-person, online, or from anywhere using its arsenal of hardware, APIs (application programming interfaces), and SDKs (software development kit). Square set of hardware will empower one to make in-person sales and receive payments while the APIs will empower one to sell on social media, on the website, in-app, by phone, by text, and via e-mail.

Considering that Jack Dorsey’s Spiral has already developed a lightning network LDK (lightning development kit) that facilitates bitcoin payments, I infer that the partnership with Codebase is potentially aimed at a much wider expansion of Square’s solutions to Europe and the rest of the world.

Larger and more established businesses may need to build a business case to change their payments processing infrastructure and hardware. They may prefer to stick to their initial infrastructure to avoid the friction of transitioning to a different system such as the one offered by Square. However, targeting start-ups allows Square to integrate its solutions in a client’s business before it scales and develops resistance to change.

So, why Codebase? Codebase is UK’s largest tech incubator for start-ups and scale-ups. It boasts of over 500 start-ups and scale-ups supported and over $4.8 billion in funding raised by members. It has a large number of incubation spaces across the UK, a rich educational ecosystem for entrepreneurs, and a large community.

Developers in the UK will now find it easy to develop innovative applications that incorporate Square’s arsenal of commercial tools to facilitate selling, payments processing, inventory management, payroll processing, banking, and business management. In the partnership, Square will offer free training to the entrepreneurs, free APIs and SDKs, free integration with Square’s software, and discounted hardware to facilitate the start-ups receiving payments, according to a recent news release by Block.

In Block’s business model, all APIs and SDKs are not charged. Customers enjoy frictionless payments while businesses are charged a cost-friendly fee for every transaction received. With the inclusion of Bitcoin’s lightning network support, Square (Oops, I am still stuck with Square and may take some time before I adjust to Block) clients will be able to send and receive Bitcoin payments at almost zero fees. In addition, with the recent acquisition of Afterpay, a buy now pay later (BNPL) company, Square’s users will enjoy the benefits of BNPL across global merchants that accept the BNPL system.

New entrepreneurs integrating Square’s arsenal of commerce tools and Bitcoin capability in the UK may accelerate Bitcoin adoption as the Square ecosystem is built to facilitate frictionless payments anywhere anytime. These start-ups will find it easy to scale up their solutions to the world as cross-border transactions may make use of the lightning network.

In addition to offering Square products to the UK, Jack Dorsey may also be looking to tap the large Codebase community for talent and introduce them to the development of payment solutions and building applications on the Bitcoin network.

Disclosure: I own bitcoin and other cryptocurrencies.