Square has just updated all their apps to add support for gift cards. It also doesn't stop there, the gift cards will also be Passbook compatible. The Square Wallet app will now allow you to create and receive gift cards at your favorite places locally while the Square Register app has received an update to allow merchants to redeem gift cards through the service.
For end users, you can simply search for the place you'd like to create a gift card for. There is nothing for the merchant to set up or allow before hand. Tap on the place and choose the gift card option. You can enter any denomination you'd like and add a contact and a personalized message. They'll receive the gift card and can store it in their Square Wallet for use later.
Gift card recipients can also send their gift cards to Passbook for easy access at any time and notifications when they're within the vicinity of that merchant.
Merchants will then be able to redeem the gift cards on their end through the Square Register app. There's nothing for the merchant to configure or do. They'll automatically see gift cards as they're available for redemption.
Merchants and consumers using Square can pick up the update now.