Square Credit Payment System Could be the End of Cash
Twitter co-founder Jack Dorsey is on a mission to kill cash. He likes money, just not actual cash transactions. Dorsey's new venture, Square, could help businesses--large and small--, and even consumers eliminate the need to carry cash.
Square allows credit card payments to be processed directly from an iPhone or iPod Touch. That part alone isn't all that revolutionary. There are a number of iPhone apps that facilitate credit card payments, but they require manual input of the credit card number. What sets Square apart from those apps is that is provides users with a small--well....square--gadget that can read the magnetic stripe information from credit cards.
Secure Paperless Transactions
Any time you are dealing with credit card data there are security and privacy issues. The credit card data read from the magnetic stripe is not stored on the iPhone at any point. The magnetic data is converted to audio and input through the headphone jack, where it is encrypted and transmitted to Square for processing.
The purchaser signs for the transaction using their finger on the iPhone touch screen. Rather than a paper receipt, the purchaser can supply an email address or SMS text number and Square will send a link that can be used to view a receipt of the transaction on Square's Website.
The credit card data is never actually seen or retained in any way by the merchant or the Square-enabled device, and even the email or SMS address is not shared with the merchant. Users can also associate a photo with their Square profile to prevent identity theft. The entire process seems relatively safe and secure.
No Merchant Account Necessary
Businesses generally have to pay fees and subscribe to a credit card merchant account in order to accept credit card payments. The ubiquitous swiper sitting next to the cash register costs money as well, or is often leased as a function of the merchant account.
The hoops and fees associated with merchant accounts keep many businesses from bothering with credit card payments. A huge advantage of Square for many small businesses is the ability to accept credit card payments without having to subscribe to a merchant account.
No Change...and No Germs
Using Square means not having to carry cash or deal with change. Aside from how cumbersome it can be to have a pocket full of dimes, nickels, pennies, and quarters, the lack of cash also minimizes the loss should you lose or misplace your wallet. A simple call to your bank to report a lost credit card and you are all set without losing any money.
Money and change also come with germs. You have no idea where that money has been. By the time the hot dog vendor in the park gives you your $1.75 in change the dollar bill and the three quarters could have changed hands multiple times that day and be tainted with cold or flu germs.
Granted, having hundreds of customers sign for transactions on an iPhone touch screen will transfer germs and bacteria as well, but the iPhone can be wiped down and sanitized.
R.I.P. Cash
Square is available for iPhone and iPod Touch now, but the company is also working on versions compatible with Blackberry and Android devices, as well as PC's. Essentially, with the right software any device with an audio jack can swipe and accept credit card payments using Square.
Square levels the playing field for small and medium businesses--particularly those that operate from booths and carts with no permanent source of power or network connectivity available. No more lost opportunities for the vendors or the customers from a lack of cash.
In fact, Square isn't even just for businesses. Anyone can set up an account and use Square to transact money. Does your cousin owe you $50 for the ticket to the Houston Texans game? Just whip out the iPhone and have him pay up.
My take--sign me up. I'm all about using my checking account debit card in place of cash and would love to be able to eliminate cash entirely from my life.
Tony Bradley tweets as @PCSecurityNews, and can be contacted at his Facebook page.
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