I had heard about this start up a while ago, but then it sort of died out and I hadn’t heard anything, that was until this week. Square, as it’s known, is a way for people to accept credit cards (and I’m assuming debit cards) as a form of payment and when I say people, I mean anyone with a compatible wireless device. And by portable device I mean cell phone or really any device with a headphone jack. The hardware plugs into the headphone jack of any device it reads the credit card and turns that into tones that are then sent through the audio jack and decoded by the Square software, then all authentication is done on the Square server and sent back to the device.
The company came about when Jim McKelvey was trying to sell a piece of his artwork, but couldn’t complete the sale because he couldn’t accept credit cards. He brought this idea to Twitter creator Jack Dorsey and Square was born. The idea is simple, since pretty much everyone has a cell phone why not give those devices the ability to accept payments of all forms. The hardware add-on is extremely small and since it uses the headphone jack to send data, there is only need to manufacture one device with one connector which will work on all mobile phones (unless of course your phone doesn’t have a headphone jack which is kind of weird, but possible none the less). The only thing missing from your device is software and currently the iPhone and iPod Touch are the only devices to have supported software, but the groundwork is there for any device to eventually use this technology.
One of the coolest features, I think, is the e-receipt system. If you’ve ever been to the Apple store you’ve seen those guys walking around with the wireless devices that have the ability to check you out from anywhere in the store, this is essentially the same idea, but it can be done much cheaper and anyone can do it. Think about it, a wireless credit card reader costs anywhere from $700+, where as an iPod Touch would only set you back $250 or so. So back to these e-receipts, basically there’s no paper after a transaction. An e-receipt is sent directly to your e-mail address indicating how much you spent, where you spent it, your signature, contact information of the restaurant (or business) and even a map of where the purchase was made. I hate receipts so this is pretty outstanding to me.
I also like the different verification methods that Square looks to incorporate into the software. If you have a Square account (I’m assuming you don’t need one to actually make a purchase, but I’m not sure) you can assign a picture to your account and it will act as another verification when you make a purchase. The device will bring up a photo of you asking the cashier to verify that the person in the picture is the person making the payment. With the amount of plastic being used these days I always feel a little safer with a few extra verifications methods.
I’m not sure when Square will launch to the public, there are currently only a few places in the San Francisco area that are utilizing it, but I have signed up to get more info when it becomes available so I’ll be sure to let you know. I would imagine that the hardware and software would be free or close to free and the transaction fees would be the only form of payment, but I’m not sure. I know I read an article a few months ago that said the cost to make the hardware itself is next to nothing since there’s basically nothing to it.
Have any of you read about this thing? What are your thoughts… Could you see yourself using this in the future? Do you think businesses will start to embrace it and we’ll start to see waitresses carrying around iPhones instead of having to take your credit card up to a cash register? That would actually be pretty sweet considering waitresses at bars can get pretty bogged down when trying to run your credit card to pay your bill.
Update: Added video after the jump
Update 12/9/09: While in Paris this morning Jack Dorsey announced that Square will be given away for FREE! And that they expect to start rolling it out to the iPhone and iPod Touch in March 2010 [cnn.com]