The Perils of Putting Everything on One Square

· 4 min read
The Perils of Putting Everything on One Square

Have you heard already that Square is down today? This major outage has put thousands of businesses at a standstill.

Founded in 2009 by Jack Dorsey and Jim McKelvey, Square was designed to help small and medium-sized businesses accept credit card payments easily. Using phones or tablets as payment registers, Square offered a simplified point-of-sale (POS) system.

Over the years, Square has expanded into a business software, hardware, and services suite. From Square for Restaurants to Square Register, it now provides integrated solutions to help businesses manage operations.

But with Square down today, many are left wondering: So what’s a business to do in this situation?

“With Square down, I can’t process any credit card sales,” wrote a cafe owner on Twitter. “My business is at a complete halt.”

While frustrating, this outage is hopefully short-lived. Yet, it highlights how heavily merchants depend on these technologies when systems fail.

Consequences of the Outage

Can you imagine the consequences of a service like this being down for about 10 hours (at the moment of writing)? Coffee shops can’t charge credit cards. Hotels can’t book reservations. Retail stores can’t process online orders. Restaurant deliveries get held up. Many companies depending on Square for payroll can’t run it on time either.

So what’s a business to do in this situation? While engineering teams at Square are likely working hard to fix the issue, the end users face real problems. Square promises to be the only payment processor for business. That’s a bold commitment that comes with real responsibility.

Perhaps the outage wasn’t Square’s fault at all. Google Cloud experienced problems around the same time, which could have triggered a domino effect if Square depended on it. But customers don’t care whose fault it is. They want to be able to process payments.

The Risks of Depending on External Providers

It’s not uncommon for situations like this to happen. A while ago, we were affected by issues with Silicon Valley Bank and payments, which were delayed due to the closure of Silicon Valley Bank (SVB) by the California Department of Financial Protection and Innovation (DFPI). This closure led to uncertainty around payments in progress. Despite the government stepping in, processing took extra days. Thankfully, by March 15, 2023, reported completing all SVB-related payments.

When core services fail, you’re powerless despite the situation. Whether you plan VIP meetings or big events, you can only find workarounds and hope issues get fixed ASAP.

So, what’s a business to do when critical platforms go down? While frustrating, try to remain calm and keep customers, employees, and business partners posted. Explore alternatives like cash or checks. And once systems are back up, follow up to retain trust.

The bottom line is outages will happen despite the best preparations. Focus efforts on communication and customer service during these difficult times. Stay constructive, not critical. And keep innovating to build resilience over the long haul.

It’s Expensive to Do Everything Yourself

The natural reaction might be to depend only on yourself. If you want something done right, you must do it yourself, right? But in reality, doing everything independently is rarely feasible or cost-effective.

Businesses thrive because of specialization and mutually beneficial relationships. It’s nearly impossible for a single company to excel at everything needed to operate successfully. Relying solely on internal solutions results in mammoth costs and endless struggles.

Imagine if a cafe tried to build its own credit card processing system from scratch. The cafe must invest heavily in technology infrastructure, from servers to software. And they’d still depend on outside utilities for power. Attempting independence by running private generators simply pushes reliance on fuel suppliers. In the same way, managing complex IT projects involves all sorts of risks and, in the end, pushes reliance on hiring scarce technical talent.

So what to do then? Having a backup plan will reduce the risk. Integrating a second payment processor alongside Square comes with development costs but enables continuity. If one system fails, the other can bridge the gap.

Rather than criticize, constructive advice empowers and reassures those affected. By preparing for outages and diversifying integrations, companies demonstrate resilience in the face of tech uncertainties. There are always steps that can be taken to become more antifragile.

Minimize Risks with Partial Ownership

The other approach is to only partially rely on external systems and have critical pieces that you own and maintain. For example, if you’re a hotel, it makes sense to have your own database of reservations and clients rather than relying entirely on an outside system like Square. That way, if the payment system goes down, you still have your booking and client information. At worst, your staff could temporarily ask clients to pay in another way to maintain good relationships.

There are risks either way. Using outside tools can be great for getting started quickly. But as the company matures, it becomes risky not to own critical software. It’s a bit like a successful restaurant renting space. If you don’t own the building, the owner could sell it or raise rent exponentially.

Owning nothing puts control in someone else’s hands. However, building everything in-house takes significant resources. There needs to be one correct answer. The key is finding the right balance for your business. As one owner said, “We want the benefits of third-party tools without being at their mercy.”

What do you think is the right approach? How can businesses balance speed and stability when it comes to software? There are good arguments on both sides.

Originally published on