Square is making mobile payments even easier

Square is one of those new inventions that I look at and think: “that’s a cool looking new feature!”. More importantly, Square looks like it will take mobile payments to the next level. A few months ago I learned about wallet-less payments with the likes of Google and Orange enabling users to pay using their mobiles without having to get their credit cards out.

Twitter co-founder Jack Dorsey has now launched Square which is a simple swipe device that you can hook up to an iPhone, iPad, iPod Touch or an Android phone to pay with your credit or debit card on the spot. The whole idea behind Square is that you no longer need fancy authorisation machines or complex transactions to carry out credit card payments.

I can imagine Square to be a particularly welcome device for small businesses or ‘one-man bands’ (think of selling your old bicycle or teaching maths to A-level students). These are the other things I learned about Square:

  1. The underlying business model is simple – For each transaction, Square charges you 2.75 percent of the total, plus 15 Dollar cents, which is a probably quite a bit cheaper and simpler than most merchant accounts.
  2. The technology is simple but clever – After the card has been swiped the customer signs the phone’s touch screen with a finger. You can tap in the customer’s e-mail address if you like; the receipt is then sent automatically, complete with a little map showing exactly where the transaction took place.
  3. The reporting functionality sounds neat – The transaction authorization process is straightforward and then you get a nice little report: your phone connects to Square, authorises the purchase, sends the receipt by e-mail and logs the transaction on your personal Square Web page. On this page you will be able to see a report showing your income for the day.

Main learning point: I’m not surprised that Square was listed as one of the 50 best inventions of 2010 by TIME Magazine. Innovations like Square’s swipe device which are very easy-to-use and serve a very clear (user centric) purpose are the ones that are most likely to transform how we use our mobile phones and how we do business.

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