Back in October of 2013, Square introduced Square Cash with the promise that it would make exchanging money between friends as easy as sending an email. The service proved popular, with around $1 billion dollars now changing hands on the platform each year. Today, Square announced that it is bringing the service to businesses, allowing them to accept Square Cash payments in place of a check or paper money.

The video introducing the service offers a clue to the market Square is hoping to capture. It shows street musicians, house painters, Craigslist sellers, and charities, all enterprises that might want to lower the friction around payments but not deal with the hassle and fees of credit cards. Using Square Cash costs 1.5 percent per transaction, a big saving over the 2.75 percent Square charges on payments through its card reader. For now, Square Cash works with debit cards only.

To use the service, the business creates a "$Cashtag" — a screen name proceeded by a dollar sign — that they can share with customers. This makes it easy to market and distribute your payment point on a business card or website, as well as offering the ability to retain some anonymity. You can ask anyone to pay for that couch on Craigslist, and all they will have is your handle, not your full name.

Square has been trying for a long time to create a two-sided payment market, matching the supply and demand of merchants and consumers. In the past they always started with merchants and then worked to extend that to customers. It tried and failed with its Wallet app, which was then replaced by a mobile order app. With Square Cash, it's trying for the first time to take a successful consumer product and leverage that into new business clients.