Mar 12, 2015 · 4 minutes

One of the best business books ever written is Studs Terkel's Working. It inspired in me the habit of asking people about their work when I can, a topic I find endlessly if bizarrely fascinating. After all, work is as much a part of the fabric of daily lives as family – in many cases it's woven more deeply – so it's a quick way to get insight into someone, but it also satisfies whatever curiosity that made me a business journalist.

A consistent theme I've noticed is that most people who own restaurants, independent stores or any small business are rarely interested in technology. Or if they like the idea they rarely have time to apply it to their businesses. Even as they use iPhones, Facebook, Instagram, and texting apps in their daily lives, when it comes time to deploying the latest data analytics or other enterprise wares built for small businesses like the ones they manage, they are practically luddites.

This isn't necessarily because there is a lack of companies wanting to help small businesses use new technologies. Tableau, Microsoft, IBM, even Constant Contact offer products and services aimed at helping small businesses make sense of the piles of data they collect through daily transactions with their customers. Square, Apple, Google, and PayPal have all offered their versions of simple electronic payments. And with the possible exception of Apple Pay, none has delivered a big hit.

That leaves companies like Square in a tough bind. The company set out to make digital payments easier by seeding local merchants with hundreds of thousands of its free credit-card readers. It created a Square Stand, a point of sale device; Square Market, a service to set up an online storefront; and Square Wallet, a digital wallet it scrapped in favor of an app for mobile orders.

Square made a bold, early move into a market for digital payments that has been frustratingly slow to take off. Digital payments still had to compete against plain old cash for meals or small purchases. The habit of fishing dollars from hidebound wallets dies hard, especially when a lot of consumers actually like that cash which is not friendly to data analytics. Meanwhile, Apple, Amazon, and others moved in with rival services that had a more seamless interface or a lower transaction fee.

This week, the New York Times reported that Square was putting its consumer-facing initiatives on the back burner in favor of “building services for small businesses.” I read that and thought, oh boy. Because if consumers were slow to take to Square's digital wallet, small businesses are going to be even tougher to sell on new services from a tech company, even if it is based on data insights gleaned from millions of Square transactions.

Companies as a rule are slow to adopt new changes in technologies. Maybe its the decades of bad memories of having to upgrade everyone to the latest, buggiest version of Microsoft Windows. There have always been a small portion of companies, large and small, who adopt new technologies early, and in the era of big data that offers them a strong competitive edge. But when it comes to small, independent merchants and restaurants, most of them are chronic laggards.

This is why the small business sector has long been a holdout from ecommerce and enterprise software. Groupon and Yelp saw early success by figuring out ways to pull many small merchants into ecommerce, but the inevitable horror stories and backlash left many thinking these sites were more challenge than opportunity. And so they returned to the default: the circa 2005 world of maintaining a Web site nobody looks at, or using email programs to stay in touch with loyal customers.

But the biggest reason small businesses are so hard for tech companies to crack is the sheer lack of time and resources. Any owner of a restaurant or mom-and-pop store will tell you the long hours that are involved day after day, week after week. When there is spare time, figuring out new technology is rarely near the top of the list of things to do. Building a competitive edge through technology may sound good, but when a business is pushing to keep its head above water it sounds like another distraction.

Among Square's new offerings for small businesses are protection for disputed payments and cash advances. The latter service will face stiff competition from peer-to-peer lenders like Lending Club or established small lenders like Intuit or PayPal. And relying on small businesses is a low-margin to begin with, because of the substantial sales force needed: Groupon spent 49% of its revenue on sales and marketing last year, while Constant Contact spent 53%.

In moving into small-business services, Square is following simple logic: There's money to be made in making life easier for these companies. But other companies have been pushing in this space for a while, only to find that it's like farming on clay soil: You can make a decent living but you'll never have a bumper crop. In that sense, it may make digital payments look attractive by comparison.