The Bankwatch

Tracking the consumer evolution of financial services

The first genuine payment innovation for a while | Square

Jack Dorsey and colleagues have announced Square; a mobile payment acquiring terminal that is small enough to fit on a key fob, and works through any mobile phone with an earphone plug. First iteration works with the iphone, but it will work with blackberry and others. The common requirement appears to be a mobile device that accepts 3rd party apps, and has a standard earphone jack. The device and application acquires the data through conversion of sound into data, then transmits.

The device is designed to replace the merchant terminal for small businesses, replace the monthly terminal fee, and replace the merchant acquisition fee. It sounds like they will charge a fee eventually, but its free for now.

Lots of holes to pick in this, but at first glance it has the potential to be disruptive in payments for at least a group of small business. There is also some talk of future enhancement for p2p payments.  One question I have is how it will deal with chip cards.

[categories payments]

Written by Colin Henderson

December 2, 2009 at 23:07

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