Square: Twitter Co-Founder Launches New Mobile Payment System
Square, a new mobile phone payment system founded by Twitter co-founder Jack Dorsey, just launched its private beta today. Square will give anybody the ability to accept payment cards without having to go through a costly credit card processing service. Instead, Square will give its users the ability to use their mobile phones, laptops or desktop computers to accept payment cards and swipe them with the help of a small dongle that will plug into the computer's or phone's audio jack.
Square is backed by Khosla Ventures and a team of angel investors. Square's team of advisors includes actress Alyssa Milano, Susan Wu, Ryan Gilbert, Ted Wang and Gregg Kid (who was also an angel investor in Twitter).
According to the information on Square's website, users won't have to sign any contracts and there won't be any monthly fees or hidden costs. Square is currently only working with a select group of companies but plans to expand widely in 2010. In its current iteration, Square works on the iPhone and iPod touch. It's not clear how much the dongle will cost, but chances are that it will be cheap, as the company plans to focus on the service and not the hardware.
Disrupting the Credit Card Processing Business
Credit card processors (the people behind the card swiping machines at your local coffee shop, restaurant or corner store) typically take a hefty cut from every transaction and charge monthly fees.
Square want to be a cheaper, more modern alternative to these systems. Square will email receipts to a payer's phone, for example, and allow merchants to track frequent customers and offer them discounts. In addition, Square will also donate one penny for every transaction to a cause of the user's choice.
Thanks to Square, every stand at a local farmers' market and every small coffee cart or hot dog vendor on the street will soon be able to accept credit cards without having to go through one of the major credit card processing services.
Competition
It's worth noting that other services like ePAY and Obopay also offer solutions that allow anybody to accept credit cards, though Square's service looks to be far more elegant than any of the current solutions we have seen.
See the next page for additional screenshots
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iPhone has no security:
- not inthe phone
- not in the transmission
After swiping your credit card data is open to anyone to steal.
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Wow that is good news a little competition should spice up the merchant card services innovativeness. Im curious as to what's next.
no doubt this could be great for accepting payments in remote locations, or sit down restaurants, but that was way too slow for most retail locations. I go nuts at the grocery store when the person in front of my whips out the checkbook.
Square is looking for someone to build out their operations center in St. Louis. Thanks......
Not terribly useful outside of the US. In the rest of the world, nobody swipes credit cards any more; we use chip + pin ...
This is awesome!
Very innovative and a clear,natural progression of mobile technology. Extremely clever!
The iPhone still has 2 huge flaws though! You'll be shocked!
Read all about - http://bit.ly/8y6I83
Great article though, thanks!
Jon
"After swiping your credit card data is open to anyone to steal."
Durrrr. Do you actually shop online. Anywhere ?
It will undoubtedly be encrypted before it hits the wire, just like any other transaction. Pretty obvious to anyone I would have thought. Do you work for VISA or something ?
The big credit card guys' should be really fearing this, it's the payment processing world's equivalent to open source software - very little they can do about it but sweat. Which is good news for the rest of us and every business on the planet. :D
Well I hope this turns out to be as intuitive as Twitter itself!
My only hope is that this is international. I will follow closely.
I saw the site this morning while browsing the net and was quite impressed. Looks to be a great option when looking into card payments, while the system also looks elegant and the site doesn't look half bad too.
Look forward to seeing how it grows over the coming months.
Very welcome, can we use it on our websites, though? A way to pay without having to use credit cards was what I was hoping for when I saw "new mobile payment system". Still good.
On the plus side it seems that it will lower the barrier to entry for smaller retailers to be able to process card payments quickly and efficiently however like someone mentioned already in the UK and a bunch of Europe we use chip and pin which is much faster than this. Also a bunch of banks are now rolling out cards with nfc so will be interesting to see how square deals with that.
RE: Engago team...
"iPhone has no security:
- not inthe phone
- not in the transmission
After swiping your credit card data is open to anyone to steal."
You obviously didn't read how the device works. It converts your CC data into an audio fie that is inaudible and uploads that to the APP. You really should read more than one article before commenting.
I thought iswipe is similar to Square mobile payment system but I think they differ because iswipe needs a merchant account. So I assume square don't need any. This technology is great! hoping this will also be available in my country soon.