04/11/2010 by AnitaMedia
Since co-founding Twitter in 2006, Jack Dorsey has started another company called Square, Inc. The Square is paving the future for small business to process financial transactions remotely.
Jack Dorsey started Square using three concepts that emerged from Twitter. Square like Twitter is immediate, approachable and transparent. Most customers use credit or debit cards as their preferred payment method. Unfortunately many small business can’t pay the high transaction fees that are associated with them. Many smaller business work on a cash and check based payment system. Dorsey created the small plastic device called the Cube, to make it possible for smaller businesses to make credit card transactions simply by using a phone.
The Square is being used on the i-Phone and i-Pod. In the future the Square will work on any storage device with an audio input.
When the Square is inserted into a audio input of a phone a credit card can now be swiped thru and information uploaded to the phone.
(The device does not need power when the card is swiped the small wheels on the device power the transaction.)
A transaction is set up on the phone ( similar to a credit card/ATM )then an electronic signature is taken, photo ID verification made and the transaction is processed. A digital receipt can either be emailed or sent via SMS.
“With the audio jack and thru the microphone we can make the device very cheap, so that we can give it away for free.” said Dorsey in a recent interview. The program is currently being tested with small business in various markets.
Additional aspects of the program include; 1-cent per transaction benefit to a charity of your choice, instant receipts and user reward programs.
Do you know of a small business that could benefit from this type of financial device?
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Tags: business, community, credit, dorsey, financial, payment, square
I have to admit Jack Dorsey is really a talented enterpriser. He always can hear the sound from consumers and try his best to address it. The Square is absolutely a great idea to push mobile financial transaction forward. I am more curious the transaction mechanism behind it. Will banks support this kind of transaction or mobile operators play an role in this financial transaction? If yes, how? Thanks for your great post. I am glad to learn more about this.
Square owners (business, consumers) are authenticated and attached to a bank account, much like PayPal. What is going to be different is the cost of the reader for the business owner. Currently point-of-sale devices in use.. cost a retailer $900. The Square will cut the cost by one third with a mobile smart phone at around $300.
Competitors are already evaluating the device. VeriFone announced a similar prototype recently that they are releasing in the future.
Ok. I think I need a new phone because no phone I’ve ever had has an audio input jack, only a audio output for headphones.
Also, the hardware is cheaper but for many businesses it is the transaction fee that hurts (up to 3%). How does this approach change the transaction fees?
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Hi Bette,
What part did you want to quote?
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