We’ve been tracking Twitter founder Jack Dorsey’s Square since May when we first got the details on the new mobile phone payment service.
Today the company unveiled its website for the first time, and they continue to test the product in private beta. Dorsey twittered that the site is live moments ago.
The idea – let people quickly and easily accept physical credit card payments from their mobile phone. A small device attaches to the phone via the headset/microphone jack. The device gets the power it needs to send data to the phone from the swipe of the card, and sends the information over the microphone connection. Based on the shots below, the device is compatible with both the iPhone and Android (or at least the recently released Droid).
Think paypal, but anyone can now accept physical credit card payments, too. With no contracts or monthly fees. People are sent receipts by text and email.
We have a short interview with Dorsey as well as a video of the product being used and will post it shortly.
Update: See our video of how the product works, and an interview with Dorsey, here.
I believed there was already an app for that.
An app that required you to punch in each credit card number. Try waiting in a checkout line at Wal-Mart where the cashier is typing in each individual CC number.
Uh…
The cashiers have debit/credit machines, they aren’t going to be using an iPhone with this attachment, lol.
It’s nice to see Mr.Dorsey innovating something new again.. Surprisingly it’s far more different than his “twitter” inspired work.
Squareup is something that should have been done years ago, finally its on the way for a skyrocketing release.
The only caveats here is will its availability only be hindered by iPhone only? Hopefully that’s not the case.
See the detailed square-up review: http://bit.ly/squareup-by-jack-dorsey-best-or-worst
There isn’t an app which acts as the merchant services provider. This would be like authorize.net making an iphone app that automatically set up a merchant account for you. They are pretty far from doing that kind of thing. Most agree the merchant experience is absolutely atrocious.
The hardware here is cool, but the innovation on merchant services is super hot awesome sauce.
Ivan, yours is the right call. Square is taking arguably the most rooted aspect of the payments process — the merchant processing — and mobilizing it. Very cool.
If square and foursquare combined one day, they can name it… Fourcubed?
You don’t teach Math somewhere, do you?
The audio swipe card reader is pretty interesting.
Looks flimsy… Durability of the devise?
More durable than your spelling?
ROFL
+1
Wow… so you collect credit card data on the fly, which may or may not store the data on the iPhone, then wirelessly transmit it to an unknown server (which is inherently less secure than hard-wired terminals), therefore classifying your iPhone as a wireless-terminal itself, which means it has to be PCI compliant and thus scanned on a quarterly basis?
How is that possible?
Or am I missing somthing?
If I’m not, I smell some violations coming your way (by your, I mean anyone who uses this product).
I was wondering the same thing, Noah. There are so many other things to think about with this new device: billing and fees (it’s not going to be free no matter how they market this), chargebacks, error messages….
It would have to be PCI compliant before it could be released to the general public. There are other wireless devices out there, so I assume it would follow the same path.
He posts his answer here.
http://twitter.com/Square/status/6243591242
As to “then wirelessly transmit it to an unknown server”, you do that with every website you type in your credit card with, I don’t see the difference at all here.
PCi compliance is enough fun.
“In February 2009, Jim McKelvey wasn’t able to sell a piece of his glass art because he couldn’t accept a credit card as payment.”
What was he selling it out of his trunk?
I take them easily with PayPal but swiping would be cool.
This doesn’t seem necessary and only kind of useful. .
Although PCi compliance aside I could have used this when I was selling pot.
Besides the quarterly scanning, it has to pass a rigorous annual questionnaire eval which – skimming through SAQ D – the iPhone does not at all do.
sorry, but you are misunderstanding PCI compliance. I assure you that every credit card terminal is not ’scanned quarterly’, whatever that means. There are plenty of payment gateways out there which can accessed over the good old internet anyway. The really confusing part for me is how you manage risk if you are signing up merchants without some underwriting. I wonder if there are low payment limits or something.
There are different classes of payment applications which require scanning and those that don’t.
Virtual Terminals (like Authorize.net) do not require the end-user to initiate any sort of scan.
But “wireless terminals” do…
The device itself has to be approved as compliant with the PA-DSS (to make sure that data cannot be intercepted if on the same wireless network for example).
See more information here: https://www.pcisecuritystandards.org/security_standards/vpa/
It will be interesting to see if they can pull it off.
-Noah
http://www.controlscan.com
Very cool technology and probably much faster than typing in a credit card number from a mobile (which is already available). Plus anything that makes it faster/easier for US consumers to spend more using credit is great, right?
The idea for the hardware piece of this equation is almost sickeningly brilliant.
Amen. The hardware has always been the expensive part of mobile processing, and they have brilliantly solved it.
I think this will be very useful if this Square device works for a desktop or a laptop microphone jack.Think about how many people would love to just swipe their credit card instead of typing 16 digit credit number on some website with all the browser security issues, key stroke logging malware etc. I think more than mobile the bigger market is those billions of desktop and laptops.
I personally feel very uncomfortable typing my credit card number in websites while shopping.
I hope Jack Dorsey reads this!!.
right on
Now that would be great if we could use it that way. I would love to have the option to swipe instead of type. Catchy tag line too
+1
Good thought here. And if there was a swipe vs keying in the credit card number, could the online merchant get “card present” rates? “Card not present” (online transactions) are cost more.
Will this ever gain International traction or even enough to ever make it easier than just using a credit card?
That’s the point: to make it even easier to actually use (well, for business owners to accept) credit cards.
For a consumer, your overall checkout experience isn’t much different. It’ll go a little faster. You’ll get fancy email receipts. It’ll feel like an Apple Store checkout. So it seems.
The great thing is for brick and mortar business owners. This should make it much easier and more feasible for those who might not want to deal with the hassle of plastic to jump in with nothing more than a phone or an iPod. Simply get a little headphone jack adapter, signup for Square, and accept plastic.
At least, that’s what I gather from the info so far.
The real beauty is that anyone could theoretically take a quick credit card swipe from his buddies to square up for the pizza that was just delivered.
I imagine the hardware will be free to encourage adoption.
That’s where I would see any possible value for this Johnny. Watching the demo of buying a cup of coffee, it seems way slower than a normal checkout and who wants that. And for that matter, all the other cool stuff like the receipt and purchase tracking, etc. is already being done. $40M valuation? Crazy VC’s.
Apple uses a modified version of the iPod touch with a credit card swipe slot in their stores. It’s cool to see someone trying to bring it to the public though, and from the looks of it this appears to be a pretty slick implementation. Should prove useful for small businesses and individuals looking to process payments in the outdoors.
The problem i see with this idea is that people just wont trust the security of this thing. I certainly would not. If i understand this idea correctly…if i see garage sale that looks interesting and want to buy something from the house owner then that owner can pull out his iPhone (w/Square), assuming i can only pay via credit card), and i swipe my cc and i am on my way.
Hmmm…
1) Security issues — i just dont have the full comforting trust from someone who made twitter (just my opinion)
2) What is stopping someone from faking this thing…It looks relatively easy to put together (software wise). All one needs is the reader for the card and he can now just keep collecting card information and sell them to the highest bidder.
Although this idea has been around for some time there is a reason it has not caught on and i just listed a few.
In order to get a device like this (or any other credit card machine, for that matter), a person has to have an account with a transaction processing company that will conduct background and credit checks. You have to be a legitimate business. The average garage sale person isn’t going to have a Square for your purchase.
This type of technology is most likely targeting existing business owners (possibly trade show artists and such) who go places where there is no land line. It’s a nice concept, but you are still a slave to cell coverage no matter how sophisticated the hardware.
What about the legit business owner’s flunky son collecting the numbers? Seems WAY to easy.
The “legit business owner’s flunky son”?
How often do you go out to eat? Do you give your card to the waiter? If you do, he then disappears with it for a few minutes, then magically reappears, handing your card back.
Did he write down the info? Does he have a card scanner back there, recording your info?
I would say that Square has less (maybe as much) risk as the current system, while making it much easier for small businesses/persons to take plastic.
It’s a win in my book.
I’m looking forward to creating my account and testing it out.
interesting to not in their about page that Khosla Ventures is an investor (Gideon Yiu is probably behind this). In addition worth noting Alyssa Milano is an advisor!
Ironic FAIL. The Google banner ad at the top of this post is for an old-timey, grey, big-buttoned, clunky credit card processor machine.
+1
There are already hand held credit card machines that are used at restaurants on planes etc. I guess this could be the common man’s device for that so street vendors could use it, maybe cab drivers. Of course Visa, Master Card, banks and cell phone companies have all been working on mobile payment systems for years, so who knows if this one will break through.
in the coffee shops i go to, the bottlenecks are not the machine, but number of cashiers and how fast they can handle each transaction. This product is interesting but not problem solving.
Like the idea of using audio card reader on PC, but i’d just use paypal most of the time.
Did I miss the price somewhere on this thing? I can see the new version of iphone having this built in and eliminating square out of the equation.
Right.. Of all the hardware things the next iPhone could have (front facing camera/video conferencing, better optics, faster processor, etc) a credit card reader makes the most sense..
Nothing would make people want to buy the next iPhone than a mag stripe reader built-in!
/s
I am so ready for this. I am a vendor at many craft/indie fairs and this is going to come in so handy. Seems like I won’t have to worry about whether or not the venue will have wireless nor will I have to call in the credit card number and worry about trying to hear the person on the other line. Indie fairs can get loud!
Yeah it sounds like he could do a great collaboration with everyone on Etsy and the like.
If your email address were to be stored by Square so you would only have to enter it on the first use, instead of every time you swipe, that would allow for the transactions times to be sped up even more. Not to mention the upsides of having a digital copy of all your receipts… search, organization, etc.
I’d be interested in learning more about how securely everything is processed and what sort of information Square stores. Just the though of this makings its way to desk/laptop computers and all things alike is very exciting.
Can’t wait to get some hands on experience with this.
It’s not new to try to integrate payment processing with mobile devices, obviously.
it’s a prototype of something that could eventually be baked into internet ready (why only think mobile?) devices but consumer adoption is a ways away and retail has already seen this movie.
if i were him i’d go to ebay and somehow try to angle into the flea market crowd to enable better payment processing yet tie back somehow to ebay, since they could scan from their phones versus the consumer having to have the device.
presently it’s too many steps for the average person to want to go through the trouble but again its a technology that could probably be integrated into internet ready devices.
well played.
Bravo, I’m already dreaming of a no paper receipt future.
+1. My bank frequently screws up the credit card payments, so I tend to keep copies of the receipt. It just adds bulk to my wallet. If I could get an email for every transaction I make, it’ll make my job a whole lot easier
or I could just use Paypal on my phone…. without the clumsy device.
Right on, this is cool and all about if they can get the device distributed. That’s going to be the challenge, and I wonder what the price point or business model for the device will be. Could be to pay a flat rate for the device, or a percentage of transactions could be retained. Not that it is a show-stopper necessarily, but I’m also curious what kind of fraud models are being considered – this is pretty unique in the sense that stealing a physical credit card and using it could have GPS coordinates from the phone… but I’m rambling.
Anyway, very cool – want: integration with Mint and Expensify.
well it can’t be a flat rate obviously. the card brands charge their percentage, and square is not going to just swallow that.
square in action in SF: http://www.flickr.com/photos/feesta/4059999330/
Pair this with RFID, maybe augmented reality and I think it could open up a lot more doors.
Scenario: Customer walks into best buy. Looks at a product. Wants to know more, and holds their phone camera up to the product and augmented reality kicks in and displays additional product info/product tour that can’t be displayed with existing real estate in the store. Also displays stores within a 10 mile radius that carry the same product and what their price is. Customer makes a decision to purchase and swipes their own credit and just like Square verifies the person using the card with a picture, it also connects with the RFID device on the packaging and verifies this is correct product. Customers says yes, payment is made and a digital bar code receipt is sent to the phone. The RFID on the box activates a paid status on the item. The customer walks out of the store, and instead of the guy standing at the front of Best Buy checking receipts, there is an RFID reader on the way out that will alert security if you walk out with something you that isn’t paid for.
The price comparison part, I think could totally start price wars/price matching though. But there are apps that already do that part anyway.
As for the audio technology it’s pretty genius. I used to work in supply chain management/product detailing around 2001and the route account people would use this black box device that had a keypad, bar code scan pen and an earpiece on the back. When they went to a store and took inventory of the stock and placed orders with the machine, they would then take it to a payphone, call an 800 number and transmit the SKUs and number of pieces they wanted to order by holding the earpiece up to the payphone. It sounded like a long fax confirmation. Sounds like this is an evolution of that. Instead of a bar code scanner it’s a card reader transmitting audio and much smaller. In this scenario, a route account manager could process payments instead of getting invoices signed, collecting cash, checks etc – keeping the flow of money moving faster for the company
Adam,
I believe the reader is only available for merchants not for individuals.
With your scenario, there shouldn’t be any need for a reader. Have the phone store your credit card information and pay right away.
Danny – I was hoping someone would come to that conclusion. Something like NFC’s iPhone add on could do that: http://ow.ly/DDXu
throw this in the dead pool right now.
Credit Card fraud is a multi-billion dollar industry, it’ll be like 2 weeks before this thing is cloned.
How long will this business last, after thousands of stories of credit card fraud surface?
“I took a taxi, and the guy had a Square terminal, I paid my fee, and 2 weeks later, I got hit with $5,000 worth of credit card fraud”
Yup… there’s a reason Visa/Mastercard insist merchants use secure pin pads with hardware based public key encryption. I suspect the fraud and chargeback rates for Square will be huge.
^ (+1)
exactly! this is going to be niche at best
Why not just make the iphone a credit card, then make an app for iphone to iphone transactions? That way if a customer has an iphone, they step up to the counter make their order, bump phones (or which ever method is chosen), and then a confirm payment screen pops up on the customers iphone where they have to sign their name.
And make this not just for iphone, but for all kinds of mobile devices (G1, Storm, Palm Pre, etc).
wonder why any one want to use this little device when they can pay with cash, these are little transactions, not big amounts
and the amount little merchant has to pay to visa/mastercard for payment processing eats up margins
First of all, very cool – always great to see innovations that make life simpler and easier.
I can see the security concerns, and am sure those will be resolved in order for this service to become mainstream.
As convenient as the solution may be, I would think that we will move towards a scan-free solution in which the credit card information is stored in encrypted format on the buyer’s mobile device, and enables the buyer to transfer the details from their own mobile device to the vendor’s processor at the point of sale.
this already exists in Japan. the main problem in the US is that the existing card brands and processors can’t/won’t agree on a single standard to support, so you would have an even more limited merchant base
In the first picture, isn’t the audio jack on top of the phone. They have it on the bottom according to where the home button is on the iPhone!
iPod touch.
This IS what PayPal was supposed to be.
PayPal founder Max Levchin’s original idea for that business was for a service to send money via PDAs…
What about Bump Iphone App when it will let you (very soon) transfer money in just 3 seconds with a simpe “Bump”?
looks pretty awesome. allowing anyone to accept a cc with a verified square type account.