One of the brainiacs behind Twitter, Jack Dorsey, has launched a new product called "Square," that turns mobile phones into credit card readers.
A boon for small businesses in particular, the device hooks into the headphone jack of an iPhone, iPod Touch, and other cell phones, including BlackBerry, and those running on Android or Symbian. It will also work on computers -- any device with an audio input jack. Currently, however, the only software available to work with the device is for the iPhone and iPod touch.
The key to Square appears to be its simplicity. Vendors can start accepting payment cards immediately with the device. There are no contracts, monthly fees, or hidden costs, and the application lets users manage all their money via an intuitive interface. And the device itself is small enough to carry around on a key chain.
Users create a Square payer account to secure every payment. Photo verification allows vendors to visually confirm cardholders' identities. Once the transaction is approved, buyers sign for the purchase using a finger to sign on the iPhone screen. The customer receives a link to a private page on Square's Web site to view stored receipts.
The device opens a whole new customer base up to credit companies -- very small or mobile businesses. In addition, it could certainly eat into some of the sales of point-of-sale terminal manufacturers, such as Symbol Technologies.
Squareup.com has details for signing up for the service; no fee has been assessed yet, but an article in the The Los Angeles Times suggests the Square could be given away at no charge. The company will give a penny from every transaction to a charity of the user's choice.