By: Angela Soric
How many times have you wanted to purchase an item only to find that the merchant doesn’t accept credit?
Twitter’s co-founder, Jack Dorsey, may have a solution for just that. He is currently testing a new product called Square, a tiny cube shaped credit card terminal that attaches to an iPhone and accepts the swipe of a credit card; ideal for small business owners.
Dorsey’s goal was to develop a phone-based mobile payment system that would allow the average person to take credit card payments.
The idea for Square formed about a year ago with Jim McKelvey, a glass artist who was frustrated after losing out on a $2,000 sale because he was unable to accept a credit card from a customer. After a lot of brainstorming, McKelvey and a group of engineers built the small cube that hooks up to a standard audio jack.
Instead of using online payment systems such as PayPal, Square Inc. allows users to take advantage of its own merchant account, taking on the responsibility while minimizing risk and fraud.
So how does it work?
Swipe a card through a slit on its side, and the device will read your credit card number and convert it into an audio signal that can be sent to the iPhone through the audio jack. Software in the iPhone then decodes the signal and sends the transaction data out over the cellphone network to Square’s servers so the purchase can be authorized. Information is encrypted on the iPhone before it gets sent.
Customers can sign for purchases by simply writing with their finger on the iPhone’s touch screen. Once the transaction goes through, credit card information is deleted from the phone, Dorsey said.
Square also works with Apple’s iPod Touch, and Dorsey would like to soon have its software running on phones that use Google’s Android operating software, too.
“We’re trying to build a utility that scales not just to someone selling coffee in a store but also someone selling their couch or buying a MacBook Pro on Craigslist,” Dorsey said.
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