Dive Brief:

• Square launched On-Demand Delivery for Square Online Store on Thursday to allow its merchants to dispatch a courier for orders placed directly on a company’s website, according to a press release. 
• Sellers will pay a flat fee of $1.50 per order to Square and a fee to a delivery partner that is based on distance and other factors. Sellers will be able to pass this fee entirely to the buyer or offer custom delivery promotions, the company said. 
• The company partnered with Postmates to be its On-Delivery partner with more partners expected soon. Processing will be free on all-demand delivery orders through July 8, up to $50,000 in sales. Square is also waiving dispatch fees until July 1.

Dive Insight:

While Square left the food delivery segment last year with its $410 million sale of Caviar to DoorDash, it never lost interest in offering delivery. In 2019, it partnered with Postmates to allow Square merchants to offer delivery to customers even without a direct relationship with Postmates. The latest program will provide additional ways for small businesses to provide delivery, without having to use an aggregator marketplace, which comes with additional costs. 

Demand for direct online ordering capabilities was growing even before the pandemic. Restaurants and chains, including Red Robin, El Pollo Loco and Panda Express, have turned to direct delivery to customers instead of just through third-party delivery. Direct ordering allows restaurants to collect data on orders and customers. 

But as Square rolls out its On-Demand Delivery program, it’s not alone in offering direct delivery capabilities. BentoBox launched its Bento Door-to-Door delivery fulfillment product on Tuesday allowing restaurants to access on-demand delivery couriers for orders placed directly on the company website, according to a press release sent to Restaurant Dive. Toast added a flat-fee delivery platform in May allowing restaurants to set up contactless delivery, curbside takeout and electronic gift cards for. Food delivery aggregators like DoorDash also offer white label products that allow restaurants to offer delivery through their websites. The additional options will give restaurants the ability to shop around, which will benefit them as many continue to build up their online ordering capabilities.