Square A Clever Bit Of Technology

Jack Dorsey, co-founder of Twitter is focused on transforming the financial sector, using technology and a clever bit of code, which enables consumers to receive payments via their smartphones, using an app and a plug-in device. Dorsey's new technology and product is called Square and launched eight weeks ago. Dorsey is hoping to empower people with Square in a different way. Its idea came about when Jim McKelvey, Square's co-founder, lost a sale one day because a customer didn't have any cash on him and Dorsey says no one in the US carries cash anymore. "Jim rang me on his iPhone to say he'd lost this sale because he didn't have any way of taking payment with a card. I thought you have this iPhone in your hand, which is like a mini computer and you can't take a payment? That's crazy and we started thinking about how to fix that. I wrote the code and Jim, being in design, created the Square plug-in."

Square is currently aimed at small business owners, which according to Dorsey there are 30 million alone in the US. Though, Dorsey's says only 6 million SMEs in the US have a credit card terminal, leaving a niche gap in the middle, which he wants to exploit. Dorsey says, "Our initial goal is to reach these people (small coffee shops, florists, babysitters) and make payments magical and awesome."

Square works by a business owning an iPhone, iPod Touch, iPad or an Android, where they download the free Square app, apply for the plastic reader, which is delivered free of charge and then plug it into the headphone socket of the device. A business then swipes a customer's card through the plastic square plug-in to process the sale. Square's technology reads the card information through the device's microphone and the customer then signs using their finger on the touch-screen, choosing to receive their receipt via text or email. Every card transaction business is charged the flat rate of 2.75pc and Square takes its cut from the 2.75pc commission, which Dorsey believes makes Square attractive to business owners. Square has no set up costs or equipment rental.

Square's technology is safe and all the protections that the credit card companies offer, also apply to Square, as its app goes over an encrypted channel and despite needing an internet connection, no information goes onto the open web. The only downside to Square is the risk of the web going.

Dorsey has strong confidence in Square and believes that this payment system suits the US business community Americans have an aversion to changing their technology systems; as unlike Europe, the US still has no chip and pin and instead American customers are happy to let their card go away with the vendor, and sign for everything...a perfect relationship for Square.

Photo Credit:Dan4th