Just days after Facebook sent shock waves through the peer-to-peer payments world, Square announced $cashtags, simple addresses that will allow individuals, and now businesses, to accept payments.

In a way, today’s announcement continues Square’s suite of services for businesses, but it is also likely another move to get cards on files, a game of scale in which it considerably trails Apple, Facebook, and Amazon.

Square Cash for businesses is called Cash Pro. Merchants are not limited in the amount of money they can transact, but will pay Square a 1.5% fee for accepting payments. This is cheaper than accepting a PayPal payment and Square’s own 2.75% for card transactions, but businesses can cut better deals with the credit card networks, and Facebook could potentially undercut it with a 0% fee down the road.

Payments guru Brian Roemmele speculates that Facebook is headed down this path. The micro merchant space, the seeming target of this initiative, is one where Square has considerable experience, although the company has had some difficulty growing out of it.

Square is also said to believe the service will appeal to not-for-profits. One of the early users of Cashtags that Square is promoting is $wikipedia.

Cashtags allow users to disassociate payments from personally identifying information. This could widen the pool of Square Cash, so instead of exchanging money with just friends, you can pay the guy selling balloons in the park while keeping your information, even your email address, private. Maybe you ARE the guy selling balloons in the park. (If so, please note that the cashtag $balloonguy was still available at cash.me at presstime.)

Where does all this leave Square? Square Cash is described by some payments insiders as a money pit for Square, and the last and largest remaining distraction from focusing on its core business of serving small merchants. Its service is perhaps the easiest and cleanest of any out there, but with Facebook and Apple bearing down on them, driven by massive scale, the smoothest UX could quickly become an also-ran. Cashtag or not.

https://www.youtube.com/watch?v=16Y4pDr8iZY