Jack Dorsey founder of mobile payments company, Square (and a Twitter founder to boot), tweeted that they are now seeing $3 million per day in payment transactions. Square is chip and pin type device that attaches to a smartphone and allows merchants to turn it into a pdq machine. It took the first 10 months to get to $1m per day, but just three months later, they have tripled that. Spured on by investment from Visa, it certainly looks like Square’s mobile payments are gaining momentum. Many industry observers believe that 2011 will be THE year of mobile payments, and both mobile PDQ and contactless are showing the possibilities.
Yet more evidence that mobile transactions will be big. Visa had previously committed to spending 100 million Euros per year rolling out mobile payments. They have now made a significant investment in Square’s credit card reading technology. Founded by Jack Dorsey, previously of Twitter’s fame, Square aims to bring mobile payments to the masses. The concept is simple enough – Square is a device that will allow anyone with a smartphone to take payments through it. Imagine that you have a plumber in to fix your boiler. You obviously won’t have enough cash to pay him, so he whips out his smartphone, clips on Square and it instantly becomes a chip and pin machine. In the US there are 27 million businesses that don’t take credit cards. Square’s aim is to give them that facility. As Keith Rabois from the company explained, ‘we’re empowering people to accept credit cards that historically have not’.
The service is proving popular already, with over 100,000 merchants signing up to it. The investment from Visa gives added weight to the concept of mobile transactions. The significance of this is not simply in helping small merchants to take payments, but in the overall consumer perception of phones as the place to make payments.
It came to light this week that Twitter founder, Jack Dorsey, is working on a new project for mobile payments called ‘Square‘. The project has been around for a few months, but the press finally put together the various pieces and worked out what they were up to!
Square is a great concept: install some software on your smartphone, then plugin a small plastic square. You swipe a user’s credit card and take a payment.
As with all great ideas, the concept is extremely simple. It is aimed at small businesses who don’t aren’t able to invest in PDQ systems. The revenue model comes from taking a small fee per transaction. It’s great to see a mobile application that will help small businesses – afterall many of the online brands that we know and love (or hate) started as small businesses.
Most people think of mobile payments in terms of taking the money from the phone bill, however Square takes a more left-field approach to it. There is no question that people are reluctant to enter credit card details on a mobile site. Even though the connection is almost the same as PC web, the trust element with mobile is missing. So if Square takes off (and I hope it will), as well as providing a useful and much needed service for SMEs, it may also change perceptions about payments through the phone.
With the introduction of NFC (Near Field Communication) systems on mobile, in app payments and now Square, the next year will see mobile commerce becoming massive.