In a blog post announcing the deal, Square details its rationale: “The payments landscape is changing faster than ever — from EMV to NFC,” Square said. “That’s why we’ve acquired Kili Technology, a company that has developed silicon, electronics, and software that simplify and optimize payment processing.”
A little background on Kili: The founding members of Kili started at cloud-based authentication company SecureKey. In October 2013, SecureKey chairman Greg Wolfond decided to found Kili and immediately acquired SecureKey’s hardware token team. For reference, token units work on physical products that authenticate your identity, like a key fob.
A year later, Kili unveiled low-cost solution-on-a-chip software for accepting contactless payments — essentially, a mobile point of sale on a chip.
For Square, it’s an obvious acquisition. The switch to chip-and-pin credit cards in the U.S. is looming near and while the company already has its own chip-and-pin card reading device, it has yet to announce NFC capabilities. NFC, or near field communication, is the technology that both Apple Pay and Google Wallet utilize. Square has already said that it plans to offer acceptance for Apple Pay; it just hasn’t said when.
With Kili in pocket, the company may be able to roll out a mobile card reader that accepts multiple forms of contactless payment sooner rather than later.
It’s also worth keeping in mind that this will not be Square’s first office in Canada. The team that works on Square Cash is located fairly exclusively in Waterloo — meaning the offices would be in relatively close proximity (about an hour and a half away from one another).
In the last year Kili has focused predominantly on developing a mobile point of sale solution. The startup’s roots, however, are in authentication. Square Cash already integrates with Apple’s Touch ID biometric authentication, but it’s possible we could see other developments in identity protection or authentication down the road with Square Cash as a result of this deal.