A new square attachment will allow iPhone and iPod Touch users to take credit card payments more easily. The big deal is that the Square lets the user swipe the credit card instead of manually entering it into the mobile device.
Other cell phone applications that allows a credit card transaction to be made through a cell phone, requires the user to manually key in the credit card number. With Square, this will no longer be required. A quick swipe of the card and the transaction has taken place.
The other beauty of the Square is the cost. Other wireless point-of-sale (POS) credit card devices such as the Verifone costs $900. The Square is free and works on an iPod Touch which runs $299.
The Square is a small square shaped credit card swiping device that plugs into an audio jack. It turns the cell phone or other device into a mobile payment processing system.
The brains behind the idea for Square are twitter co-founder Jack Dorsey and his friend Jim Mckelvey. Their idea came from Mckelvey’s frustration about not being able to sell a piece of his glass artwork since he did not accept credit cards.
In February, 2009, the two came up with the idea of Square. Ironically, the latest method of receiving payment was born right beside where the old San Francisco US Mint once was.
Through angel investing from Khosla Ventures, the new company Square was started with $10 million in funding. In less than a year, the company has produced a device that allows anyone to accept credit card payments for anything.
Currently business can get a credit card merchant account. That costs money, time and is often frustrating. Plus there is a monthly account fee even if no credit card transactions take place.
Individuals that want to take credit card payments must use Paypal. Square takes away the hassle of getting and having a merchant account and makes taking credit card payment easy for everyone.
The Square is perfect for small businesses that do not have large numbers of credit card transactions. These vendors will no longer have to pay the monthly service fee in addition to the transaction fee. They will only have the small transaction fee at each transaction.
The Square is also a great option for vendors that are mobile. Vendors such as artists and craftsmen that set up at festivals and events will no longer have to loose sales for not being able to take credit cards or having to bother with taking down the credit card information and processing it when they return home.
Street venders such as hot dog vendors on the street could soon start using Square to take payments for the dogs. No more having to count change. This video shows how easy it is to use the Square.
The Square could even be used by individuals for simple things such as when they have garage sales. If someone wants to purchase something, but does not have the cash; they can use their debt or credit card to make the purchase.
Square is even working on the idea of creating mobile devices for larger retailers to use on the sales floor to complete the sales transaction. That would cut down on shoppers changing their mind in the checkout line.
The Square works by plugging it into the audio jack of a device. All else that is needed is an application on the device which is expected to sell for around a dollar.
Currently, Square is only working on the iPhone and the iPod Touch. The company is working to have it available for other cell phones and laptops soon.
To take a credit card payment, the vendor just swipes the card and then the person approves the charge and signs their name with their finger. The transaction is secure and safe as no credit card information is stored in the device and is encrypted while it is being sent.
The vendor will be able to see what the fee is for that transaction and the fee is taken out immediately. Meaning the amount after the fee is taken out is the amount transferred into the vendors account. With a merchant account, the full amount is deposited and then within a month later the fees are taken out of the account.
There is also no paper receipt. The person purchasing the item can give an email or SMS text number and a link will be sent for them to have access to the receipt online. Once the card is used, Square will remember the email address for future purchases.
Square has not released any detail on what the transaction fee will be at this time. Square is currently going through beta testing at a few locations.
It is expected to be available in 2010. Square already has agreements with Mastercard, Visa and American Express to process payments.
What Square provides businesses and individuals is a secure immediate processing of a credit card transaction; all without the hassle and cost of current options. It is as simple as a swipe on an iPhone.
Written by Denise Clay
For Huliq
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