"So, this changes the way marketers can communicate with their customers. Are there any specific ways that you've seen marketers use this technology effectively?

What we see very much with our merchants is as they come on to Square Wallet, we see them utilize just basic specials, like 10% off your first purchase. Or using punch cards. So those are some ways to drive a meaningful sense of loyalty, but I think we are only scratching the surface of that.

I think most bigger merchants certainly don't want to be in the price-discounting market. That doesn't ultimately drive loyalty, it just ends up hurting your top line. The thing that drives loyalty is understanding a particular pain point. I think the airlines have done this well with allowing me to just skip through security lines in first-class or allowing me to board the plane first. These are effectively free giveaways, but they inspire so much loyalty.

That comes back to knowing your customer, and that's where I get really excited. With Wallet, you start to really understand your customer, so it isn't just about giving away freebies. It is much more about giving me things that are important to me."

That is very well said. It's not about discounts, it's about freebies that instill loyalty. 

"The other value I always think of when giving people advice is, give it soul. Don't forget your customer. At the end of the day, I think people get really caught up in technology for technology's sake, but spend time with your customer and go out and feel their pain. We can get way ahead of them with all gee-whizzy-bang amazing stuff, and then you have a coffee shop that is counting cappuccino cups, trying to figure out how many cappuccinos they have sold. Go live in your customer's shoes for long periods of time and never forget your customer as you innovate.

That is the great yin and yang — do transformational things but always bring it back to solving a real problem, not a problem you've made up in your head."

Okay, THAT advice is too gossamer to be actionable.

Square has millions of customers with different pains. Any given customer might have an entirely different pain, and anecdotal evidence could make a company do the wrong thing.