Small Business’s Welcome The New Way To Accept Payment
Posted by admin on December 30, 2009 in Internet Marketing [ 0 Comments ]
This is a guest post by David Towers
With Twitter riding high, it’s no surprise see the founders using their newfound clout to tackle bigger targets. And what could be more imposing than the financial industry. Along with glass-blower Jim McKelvey (also his former boss), Jim McKelvey has launched Square, the first major development in online purchasing since Paypal.
Square is not the only company intending to capitalize on the idea of easy card access all the time, for a small fee anyone can experience the privilege of swiping plastic in their very own homes. SmartSwipe connects to Windows PCs via the USB port and allegedly works with 98% of online retailers. However, this sort of product will presumably only ever have limited appeal. While it adds an extra layer of security away from potentially perilous credit card fraud, and avoids the need to repeatedly type a 16 digit number, the average user gets no additional benefit from the device.
Dorsey’s goal is more far-reaching. It came from the realization: “everyone has this little plastic device in their pocket today, which is a payment card, credit card, debit card or pre-paid card, and they’re using them everywhere”. In a world where every is carrying around their own electronic devices, in the form of mobile phones, it makes perfect sense to try to cut out the middle-man.
Using Square’s iPhone app, users can be set-up and paying within 60 seconds. To be used, a card-reading dongle must be added by the merchant to the smartphones audio input and confirmed by a signature ‘drawn’ on the phone. One cent of every payment will go to a charity of the user’s choice. Even if the user doesn’t have a 3G iPhone, the encrypted data could still be transmitted via encrypted wireless using the iPod touch. And with the dongles designed to work with the headphone jack, it should theoretically work with almost any phone!
The benefits of such a service are manifold – most notably, the ability give anyone the ability to accept credit cards without going through the expensive card processing service. Small businesses, and even simply local vendors, will hugely benefit from being able to accept card-payments instead of relying on dubious checks or forcing customers to carry an unwieldy amount of hard-cash.
Other than the consumers themselves, the fact this should lead to an upturn in card use should be a boon for the banks as well. In order to compete, they will need to come up with even more credit card rewards and offers to try to keep up with the pack.
While Jack Dorsey hit the homerun by allowing people to post 140 character messages on the Internet, it could be Square that provides a more significant legacy.