Square Mobile Payment System

Square Mobile Payment System

This week, Twitter co-founder Jack Dorsey will be launching his new startup called Square, which is a mobile payment system that allows merchants and individuals to do business or process credit card transactions by using mobile devices to scan credit cards, debit cards or prepaid cards. According to Square’s website, the initial inspiration came from one of its founders Jim McKelvey who had an experience early this year where he wasn’t able to sell a piece of his glass art because he couldn’t accept credit card payments. For now, the Square software only works on the Apple iPhone and the iPod Touch but will eventually be made available to different mobile platforms like Android, Windows Mobile, BlackBerry, etc.

The process is made possible by a small, square (hence the name Square), stamp-sized plastic device that you plug into a mobile phone’s headphone jack. As soon as the unit is plugged on a device, it automatically turns it into a wireless credit card terminal. Users then swipe the card into the “square” and then, the card information is converted into an audio signal which is then processed and encrypted by Square’s software and transmitted for further processing to Square’s servers via WiFi or 3G connection. Users can confirm the card holder identity with photo verification and the user signs the transaction using the mobile device’s touch screen. Paper receipts are eliminated and users can opt for either an email or SMS text that contains a link to the transaction receipt. Another thing to note is that for every transaction you make using Square, they will donate a penny (1 cent) to a charity/cause of your choice.

As of this moment, its still uncertain whether Square will be charging for the plugin device and/or for the account. In his interview on the Los Angeles Times, Dorsey said that the plugin device are so cheap to make that they might consider giving it away for free to Square account users.

Popular tech blogger Om Malik of GigaOm sees Square’s potential to be a disruptive technology* in the POS (Point of Sale) industry and has this to say:

“Verifone makes a $900 wireless credit-card terminal vs. Square, which runs on a $299 iPod touch. I rest my case,”

I see Square as a very useful tool not only for individuals like me but I see that it will be most beneficial for small business owners and street vendors like McKelvey, who can’t accept credit card, debit card and prepaid card payments because they don’t have the necessary hardware. Square looks very promising and can definitely start a new revolution in the micropayment/mobile payment and POS industry like what Om Malik said.

Square is still in beta testing right now but will be made available to the public next year, 2010.

What do you think of the Square mobile payment system? Would you consider it as a disruptive technology? If you had access to it would you use it? Please share your thoughts.

*disruptive technology – innovations that improve a product or service in ways that the market does not expect.

Owner and editor of JaypeeOnline. Self-proclaimed geek. New media writer and consultant. WordPress advocate. Loves blogging, gadgets, video games and sports. You can follow him on Google+, Facebook or Twitter.


  1. Diana

    February 15, 2010 at 9:01 AM

    I think square is the remarkable product..
    I hope to try it soon.
    btw its a very nice review :)

  2. archondigital

    December 13, 2009 at 12:48 AM

    all the more reason to get a good smartphone…

  3. Lito|TheFilipinoEntrepreneur.Com

    December 11, 2009 at 1:43 AM

    Wow that is really hi-tech! seems that I’ve been dreaming of this kind of technology many years back. BTW congrats for being a winner in the Blog Awards 2009.

  4. ConnieFoggles

    December 10, 2009 at 11:48 PM

    It’s amazing to see how far technology is coming along.

  5. Michael

    December 8, 2009 at 5:25 AM

    amazing gadget, with just a small gizmo online payments are possible. This is sick!

  6. Beginner Blogging Guide

    December 7, 2009 at 10:09 AM

    This is just amazing! With just a small compact gadget a payment can be done anywhere! wow.

  7. Japaul Vergonia

    December 6, 2009 at 5:55 AM

    Hope that Square technology will work as intuitive and as effective as possible. :D

  8. Industry News

    December 4, 2009 at 1:23 AM

    Square is going to revolutionise the point of sale industry. I am actually surprised that the big players have allowed them to come so far! At the end of the day it just makes things simpler and easier for vendors, perhaps ultimately paving the way for a true cashless society, where people can conduct transactions via their squares and mobiles.

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