What Is Square's Competitive Advantage?

Square (NYSE: SQ) made a name for itself by developing little credit card readers that hook up to a smartphone or tablet. It made it easy for anyone to accept credit cards, from tutors to food trucks. But now, as Square continues to move into more traditional brick and mortar businesses, it faces intense competition from companies like Intuit (NASDAQ: INTU) and Shopify (NYSE: SHOP).

The switching costs for these new point-of-sale services are relatively low, and Square's pricing isn't always better than that of its competitors. While Square has done a great job bringing new merchants on board, investors need to ask what its competitive advantage is. What's going to allow Square to generate meaningful profits in the face of growing competition?

Image source: Square

Source: Fool.com