The news: Block-owned Square unveiled a handheld point-of-sale (POS), Square Handheld, largely catering to food and beverage merchants. 

This product’s value proposition: Square Handheld targets small companies that benefit from a portable, streamlined POS that could be brought to customers at restaurant tables or tattoo parlor chairs.

Square also hopes that its vertically integrated app will add to the device’s value, letting sellers toggle between different modes—restaurant, retail, appointments, and invoices—to capture all their business needs in one place. 

Square is betting that if it tailors both its software and hardware toward small merchants, it can cement this sector’s loyalty. As of Q1 2025, roughly 30% of Square’s merchants fall into the SMB vertical.

Narrow capture: Crucially, the handheld device appeals to a key slice of Square’s possible adopters. The smallest merchants, such as booths at farmers markets or craft fairs, are more likely to use softPOS options that make sales possible from an iPhone or Android. For example, merchant adoption of Visa’s NFC Tap to Phone has surged 200% YoY, according to recent company materials.

These small sellers might not be able to justify the $399 cost of Square Handheld against their slim profit margins and small-scale businesses. 

On the other hand, large companies may have the flexibility to select a variety of POS systems through their purchasing power, but may already be wedded to longstanding partnerships with their POS providers. 

Our take: Square is facing competition from rivals like Toast, Stripe, and Clover. 

It understands it needs to specialize its offerings to remain competitive. That’s why Square is leaning into vertical-specific features fine-tuned to capture a small-market merchant within their ecosystem—as well as offering banking tools that dropped this month.

With Toast and Fiserv’s Clover recently rolling out AI tools and a vertically integrated kiosk for food service, respectively, Square is trying to refresh its POS lineup to serve its merchants’ previously unmet needs.