Square Credit Card Reader: Giving Smartphones Credit Where It Is Due
By Ed Hardy
Has this happened to you? You and your friends get together for the Big Game, some people bring a few 6 packs, and you order a pizza or two. When the time comes to split up the cost, one of your buddies says “Sorry Dude, I didn’t bring any cash. I’ll pay you back sometime.” You grind your teeth because this guy never picks up his part of the tab.
Or how about this? Your family goes in together to buy Mom a really nice gift. On the day you give it to her, no one thinks to bring any cash or their checkbook so you spend a months reminding people they still owe you a couple of hundred bucks.
There’s a simple solution for both irritating situations. How would you like to pull your smartphone out of your pocket, plug in a small accessory, and say “That’s fine. Just hand over your credit card and I’ll transfer the money right now.” You can, with Square. And did I mention that it’s free?
How It Works
Despite its name, Square is actually quite cool. It’s a small accessory and an app that turns your smartphone into a credit card machine. It is available for iPhone and Android, and doesn’t even require a special port: it plugs into your phone’s standard headset jack.
Square will send you a reader for free, and setting up an account is equally free and easy. There is no obligation to use it, and there are no subscription fees. The only time it costs you anything is when you transfer money. The company behind this amazing gizmo will take 2.75% of any transaction as its fee.
The card reader and app are easy to use. Type in the amount you want to transfer, put in a description, swipe the card, ask the person to sign their name, and you’re good to go. It’s quick and easy.
With Square, if your buddy owes you $10, you can get the money from him right now for a mere 28 cents. This seems an ideal solution for a time when we all pay for almost everything with our credit cards — people don’t have much cash with them, and hardly anyone carries a checkbook around anymore.
The company is only a couple of years old, but has already sold more than 800,000 card readers to retailers, who use it to process more than $2 billion in payments annually. Just last month, well known entrepreneur Sir Richard Branson became an investor in the company (most of its business is in the U.K.) and now the technology is available in the U.S.
While retailers are the primary users of a version developed for the iPad, company execs think a sizable number of everyday people will be attracted by the ease of use and simplicity of making on the spot payments with their mobile phones.
Look for a full review of Square on Brighthand in the coming weeks.
Price: Free, but 2.75% charge per swipe/transaction
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