Square: A New Way To Pay
Square: A New Way To Pay, Normally when you shop around the Web or at physical locations around your city, you don’t think twice before flashing your credit/debit card and swiping it to get cleared. Plastic money, as it has been popularised, has almost become the ubiquitous way of payments world over. Now this is all set to change. One of the ways this is being explored, researched and talked about is Near Field Communications. Nokia C7 and the latest Android phone, Nexus S come with NFC chips – all they need is developers to write apps and get going with it. While NFC takes some time to take off, we have had someone working on a new way to pay. And that is none other than the co-founder of Twitter, Jack Dorsey.
This new service called ‘Square’ has been adopted by a few start-ups in San Francisco area and Dorsey aims to target all the 30 million small business owners in the US alone. Users need to download the free app and apply for the plastic reader separately, which is free of cost. The service will only work with iOS 9 (iPhone, iPod Touch, iPad) or Android devices.
Once the device has been plugged-in into the headphone socket of your phone, to make payment you need to swipe your customers card through the ‘Square’ plug-in. The square reads the card information using its in-built microphone. Customer authenticates the payment using his fingerprints on the touchscreen and chooses to receive a receipt via a text or e-mail. The payments are done – next shop!
But how does ‘Square’ make money in this whole convenience game? It charges a flat rate of 2.75 pc per transaction from vendors. However, this rate varies with different card companies. Vendors would be compelled to change to this new system since it is a cheaper option than the traditional swipe machines. Plus there are setup fees and monthly fees that are a liability – Square does not need to be ‘installed’ as such and can be carried anywhere.
The idea of making such a device came to Dorsey when his friend and Twitter co-founder Jim McKelvey called to tell him that he could not collect payment from a customer because he was out of cash! In the US, almost all of the spending folks shop without much cash in hand and there was no way Jim could have collected his payment using the customers card. It struck with Dorsey that Jim having a mini-computer like iPhone and not being able to collect payments sounded almost ridiculous. That was it, and he decided to work on the idea.
The only possible downside to this service is Web failure. In case, a merchant terminal malfunctions or the phone line goes dead, there are people who can fix it for you. But with Square, all of the system runs on the Web and Square might not be responsible for a ‘Web failure’ with you. However, the founder is working on fixing this issue.
Dorsey plans to make this service a ‘US-exclusive’ only for now, but international expansion plans are on being considered.
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