When Jack Dorsey’s new startup, Square, was first unveiled in December, there was a lot of excitement about it. And rightly so. It looked like it could revolutionize the way individuals accept payments for their work using their smartphones. But the road to the revolution has been a bit rocky. Today, Dorsey sent an email to the early adopters of Square explaining some of the reasons for delays in getting the product up to speed — and announcing a new indefinite delay.
Of note, he admits that, “we’ve let our excitement get the best of us and have released parts of Square before they were fully baked.” Square had hoped to have the service ready to roll in “early 2010,” but it’s already the middle of the year now and many users are still without units. Dorsey says that while initial hardware shortage issues have been resolved (by sending co-founder Jim McKelvey to China where the devices are made), now a credit processing issue is hampering the service.
As such, Square has decided to halt the mass shipment of Square readers (the little hardware dongle required to read credit cards). They are now “rethinking and expanding our underwriting infrastructure,” Dorsey notes. The main problem now is that to ensure credit fraud doesn’t run wild on Square, they limit transactions numbers — but customers are complaining those limits are too low. Square agrees, so they’re trying to figure out a new way to handle things.
So when might this problem be resolved? “We’re working on the ETA for mass shipments,” Dorsey tells us via email. “We want to make sure the underwriting is solid to manage the fraud and risk,” he continues.
Below, find the full email Dorsey sent to Square users:
Dear Square user,
We announced Square with the phrase: “0 to $60 in under 10 seconds.”
Square’s goal is to enable people to accept payments immediately, everywhere. We realize the amount of time we’ve taken to ship our Square readers has been frustrating, sometimes confusing, and has generated a number of questions. When we announced the company last December, we estimated Square would be ready in the U.S. sometime in early 2010. Since then, we’ve let our excitement get the best of us and have released parts of Square before they were fully baked.
A recent email from our support team to a Square user sums up where we are:
Until recently, we were facing a big hardware shortage, but that is now resolved (we sent our co-founder Jim to China for a couple weeks to arrange better manufacturing, and that did the trick). The problem has transitioned to something we’ve been working on simultaneously, a credit processing and risk issue. We need to strengthen our underwriting infrastructure so that we can handle the huge demand for readers and still manage the risk of chargebacks and fraud. This is the last thing preventing us from shipping readers as fast as we’d like, and we have pretty much the entire team working on it.
The way we are handling the risk of chargebacks and fraud is through transaction limits, but we have received feedback that those limits are too low. We are rethinking and expanding our underwriting infrastructure to address this issue. As soon as we finish, we will send you an email to confirm that you would like us to run a credit check (or you can cancel your request to process cards with Square which will securely remove your personal information). We will then ship your free card reader and activate your account to accept card payments.
We thank you for your continued patience as we work to deliver a utility you can use every day and for allowing us the time to get it right.
Square is making commerce easy for everyone. Starting with a free credit card reader for the iPhone, iPad, and Android devices, Square Reader allows anyone to accept credit cards anywhere, anytime, for a low transaction rate of 2.75 percent per swipe, with no hidden fees. Square Register serves as a full point-of-sale system for businesses to accept payments, manage items, and share menu and location information. Square Wallet, available in the US, is the most seamless way to pay,...