I just became a mobile merchant. A few days ago I received my credit card swipe acceptor from a startup called Square, which was founded by Twitter co-founder Jack Dorsey. The credit card acceptor, or swipe, as Square refers to it, measures an inch square and plugs into the headphone jack of my Samsung Galaxy Tablet.
Having set up an online account – which takes just minutes – I can now accept credit card payments that post directly to my checking account minus a 2.75 percent transaction fee.
Square gives anyone the ability to process credit card transactions, and more than a million such transactions are being processed using the system each day. While most of these are individual business owners, such as plumbers and other craftspeople, the units are finding their way into the food and retail industries.
For example, a granola supplier from California uses the Square system to accept credit card payments at farmers markets. Zappos, the online retailer of shoes and accessories, uses them to accept payments at sample sales of extra inventory, with the proceeds going to charity.
Recently the CEO of VeriFone – which manufacturers a competing system called Payware Mobile – wrote an open letter to the industry pointing out security flaws in the Square system, a claim which Square’s Dorsey publicly refuted.
Regardless of who is right and who is wrong, one thing is clear – mobile payments are here to stay.