As much as I love my wallet — it’s quite nice and it was given to me as a graduation present — I long for the day when I no longer need to carry it with me. That day is closer than you think. A new company called Square, led by Twitter co-founder Jack Dorsey, just released an app for the iPhone that might soon make the need to carry cash a thing of the past.
Square’s product is a payment platform that makes it easy for anybody from small businesses to individuals to accept credit or debit card payments easily with minimal setup. The company just released it’s iPhone app to the general public and they also have an app for the iPad and Android. These apps, combined with a small magnetic strip reader that plugs into a standard headphone jack, turn any Internet connected iPhone, iPad, iPod Touch or Android device into a mobile point of sale (POS) .
The idea of using a phone as a mobile POS is not entirely new. BlackBerrys and iPhones have been able to do it for some time, but they required specialized hardware and software that was not necessarily available or marketed to the general public. Some services like VeriFone’s PAYware mobile are more targeted at companies than individuals. VeriFone, for example, uses a sleeve that encrypts the credit card information and sends it to banks without ever saving it on the phone. Features such as this are great but the cost of hardware, increased setup complexity and the need for merchant accounts and monthly fees make such services inaccessible to individuals.
Enter Square. Square’s apps are available for free on the Android Market or Apple App Store. There is no registration fee, monthly fee or contract. When you sign up you can start taking payments by typing in credit card numbers until your reader, which they send you for free, arrives in the mail. The proposition is very tempting even if you can’t see yourself using it too often because there is no commitment involved. Soon enough there will come a time when you just happen to have Square on your phone and your friend happens to have no cash. And Square is happy to take 2.75-3.5% of your transaction plus 15 cents. It doesn’t seem like much, but if all goes well for Square it will quickly add up. Square’s strategy resembles a strategy used by Microsoft in its early days, when it distributed DOS for free to PC manufacturers.
Add that to the long list of angels and investors — a list that includes the likes of Twitter co-founder Biz Stone, Digg creator Kevin Rose and Google VP Marissa Mayer — and it’s no wonder that the company was valued at $40 million even before launch. It’s also no stretch to think that despite initial reservations about friends or even strangers swiping their credit cards, Square has the potential to truly change the way we handle currency and take us one step closer to making cash obsolete.
More: TechCrunch, Square’s site, Download app for iPhone/iPad or Android
Images courtesy of Square:
(Above) Screenshots of the Square apps for (clockwise from left) iPad, Android and iPhone.
(Below) Square allows merchants to send receipts via email or SMS including the purchasers signature which is entered into the touchscreen device at the time of the sale and a map indicating the location of the sale.
