MONTREAL — Square has big ambitions for Canada, where it is looking to roll out more of its products at a time when payments companies are competing to reach merchants with an ever-increasing array of services, from e-commerce to loans.

The San Francisco-based fintech company says it is growing rapidly in the country, its first expansion market beyond the U.S. It has doubled its sales staff in Canada each year for the last two years, and plans to continue hiring at a similar rate, said Ashley Grech, Square’s global head of sales, in an interview with The Logic. 

“We’ll continue to see that type of investment, particularly because we just feel a real appetite from small, medium and large businesses to try something new,” Grech said. 

Meanwhile, as the company plots how to bring more of its services to Canada, an increasing number of competitors are fighting to reach vendors with products of their own. Lightspeed and Fiserv-owned Clover are just two companies vying for a greater share of the POS terminal market. Shopify, and more recently, Lightspeed, compete with Square in e-commerce (Square acquired website builder Weebly in 2018 to allow its merchants to more easily build e-commerce sites) in addition to key areas like payment processing.

Square has hundreds of employees across four offices in Canada, its largest international presence, according to a spokesperson; it also operates in Japan, Australia, Ireland, Spain, Norway and the U.K. As of publication time, it was hiring for 54 roles based in Toronto, according to its website.

The company, co-founded by Jack Dorsey in 2009, first brought its signature white card reader to the Canadian market in 2012. In addition to its point-of-sale hardware, it now offers a variety of software products, including tools to help businesses build loyalty programs or set up online stores.

Still, only some of Square’s products have been released in Canada. Products available in the U.S. but not in Canada include Cash App, its peer-to-peer payment service, and Square Capital, which offers loans to businesses. “Our No. 1 goal as a company at this point is product parity across all countries,” Grech said.

Square hasn’t specified when it aims to release Cash App in Canada, where a number of fintechs are developing peer-to-peer payment services, despite Interac e-Transfer’s dominance in the payments market. A new Real-Time Rail was supposed to make it easier for fintechs to provide services that rival e-Transfer, but the organization in charge of developing the infrastructure has considered stripping away some features from its initial launch, The Logic previously reported, limiting its benefits for tech companies.

Another area in which Square hopes to make further strides is lending, where Shopify and Lightspeed have been gaining some traction. Still, varying regulatory requirements in different jurisdictions make rolling out the product in more regions a slow process, Grech said.

“Each country will have different lending laws, and different requirements for lending for non-bank financial institutions,” Grech said. “I can’t speak to timeline, but we hear the same demands from our Canadian businesses. They want it, and so we’re working on it.”

One way Square could gain an edge over its competitors is through an upcoming buy-now, pay-later offering: earlier this month, Square announced it was buying Australia-based Afterpay for US$29 billion. The BNPL provider, which launched in Canada last year, offers customers the ability to pay for purchases in four interest-free installments, encouraging increased spending with vendors that partner with the service.

MoffettNathanson analyst Lisa Ellis wrote in a research report last week that the acquisition will help Square’s products stand out in an increasingly crowded market. Afterpay will also help Square expand its international presence, with more than 50 per cent of its business concentrated outside the U.S., compared with more than 90 per cent of Square’s gross profits coming from the U.S., according to MoffettNathanson. Some of Afterpay’s most prominent partners in Canada include Aritzia, Lululemon and Bed Bath & Beyond.

“Because Afterpay brings merchants a demonstrable increase in ticket size and conversion rates, the integration of Afterpay into Square’s seller offering will help the seller business differentiate itself from alternative providers,” Ellis wrote.

Canada’s BNPL sector has been building momentum in recent months, with Klarna expanding its presence in the country and Visa announcing a new installment program in partnership with Scotiabank. 

Rival Lightspeed doesn’t have plans to roll out a BNPL service of its own for now, CEO Dax Dasilva told The Logic last week, though it has a partnership with PayBright—a Toronto-based company that Affirm purchased in January. In her note, Ellis suggested that Square’s acquisition of Afterpay could trigger further consolidation in the sector.

For Square, BNPL has been among the top product requests from vendors in annual reports compiled by the company’s sales and customer-service teams, Grech said.

Within the Canadian market, Square has seen particular growth among food and beverage vendors in the past few years, Grech said. The number of sellers in that sector has grown by an average of 16 per cent per year since 2016, while the number of customers in that category with more than two locations has increased 44 per cent annually since 2016, she said.

As of March, the number of middle-market sellers, or businesses with revenues roughly between $10 million and $1 billion, has grown more than 15 times in Canada in the last five years, Grech said.

Editor’s note: This article has been updated to clarify that Square doubled its sales staff in Canada. A previous version did not specify which department had increased staff.