Twitter‘s co-founder Jack Dorsey (@Jack) just founded a new company called Square. It’s a new innovative way that lets people authorize, accept, and process credit card payments through their mobile devices with an inexpensive accessory. At launch, the Square service will be compatible with the iPhone and devices running the Android operating system. Square requires two different components to function. The first is an application that will be available for your phone. The second component is, what should be, a fairly inexpensive device that plugs into the headphone jack.
After swiping your card, authorizing the payment for the correct amount, signing the transaction using the touchscreen, Square will instantly send you a receipt via email or text message (see image on right). If you setup a Square payer account, you can speed up and secure payments through photo recognition. In addition, Square tracks repeat customers, so it can easily offer rewards to them. You’ll no longer have to carry those punch cards around with you.
The Square service won’t have any contracts, monthly fees, or hidden costs. They will even donate a penny after every transaction to a cause of your choice. Square hasn’t mentioned the cost per transaction, but this could definitively be a hit if the number is low. This would be a great way to accept payments from a buyer through Craigslist when you meet with them. If this goes well, it can easily become an easy way for both small business and average customers to accept credit card transactions on the go.
Our Senior Editor, Sahas Katta, just heard back from Jack Dorsey. We will be getting access to this service fairly soon and should be able to publish a review prior to an official launch.