Most people habitually use credit cards to pay for purchases. What if you could also get paid by credit cards for products or services you offer, be it crafts or art work, your part-time hobby business, junior’s lawn mowing business, or even your next tag sale?
If you don’t think that’s possible, think again. If a nifty new smart phone application catches on, you could soon be swiping away happily ever after, and, you’d be swiping other people’s credit cards, not your own.
A new company, co-founded by former Twitter chairman Jack Dorsey, aims to level the playing field so that everyone, not just established businesses, will be able to accept credit cards. The new company, dubbed Square, has just released the beta version of a new device for smart phones, which turn iPhones (and soon other mobile phones) into a credit card reader. Users simply plug the small square device into the headphone jack of their iPhone or iTouch, and bingo, they are ready to scan and process credit cards.
The Square card reader device can be attached to any device with an audio input jack, not just mobile phones. In the case of the iPhone, when card users swipe their card, they sign off on the transaction with their finger on a receipt image, which appears on the iPhone. The cardholder can then choose to get a receipt for the transaction sent via email or mobile phone or access the receipt online.
Typically, for a business to be able to accept credit card payments it must go through a long application process and acquire expensive hardware to process the credit card transaction. Square enables users to begin to accept credit cards and debit card payments immediately, without having to sign up for contracts, or pay monthly fees.
Square users pay a small percentage plus a fixed fee to Square for processing each transaction. The credit card payment is then transferred directly into the Square user’s bank account, greatly simplifying the merchant side of the credit card processing. Square donates one penny from each transaction to a charity of the payer’s choice.
According to CNET News, Square aims to keep the production cost for the new device below a dollar; the company may even opt to give away the device for free and instead make their money on transaction fees.
The idea for the new product, according to Square’s website, originated when company co-founder Jim McKelvey couldn’t sell some of his glass art, because he couldn’t accept credit cards as payment. Initially, the new product will be available in a limited beta edition, but the company is expecting to make Square universally available in early 2010.
