Smartphones are increasingly performing impressive tasks as users customize their devices using the Apps infrastructure for each respective device. Square, a mobile payments company, has a highly practical idea: allowing a smartphone to process a mobile payment on the spot, which could be revolutionary for the small-business owner.
Investors see the value of mobile payments as well, and a group led by Kleiner Perkins Caufield & Byers has funded Square to the tune of $100 million. This puts the value of Square upwards of $1 billion.
The mobile payment possibilities are vast. Imagine the self-employed contractor getting paid via credit card at a client's home rather than having to bill and wait for payment. A collector of high-end coins can conduct a safe, cash-free transaction wherever his buyer can meet. Even a small business with a traditional storefront can forego the traditional credit processing setup and provide customers with the ability to pay via plastic with far less hassle.
Square, a company out of San Francisco, is brought to you by Jack Dorsey, the same guy that invented Twitter. Square provides a small scanner that you plug into your smartphones audio jack. Simply run the complementary app and your phone is now a credit card machine, able to swipe cards and read the information on their magnetic strips. Both app and device are free; Square makes its money from mobile payments through charging 2.75 percent of the transaction amount plus 15 cents. (Square is primarily intended for face-to-face transactions, but account holders can key in payment info as well, at the slightly higher rate of 3.5 percent plus 15 cents per transaction). The software and device also work on the iPad. Bonus: customers, even those opting to pay cash, can receive an electronic receipt through Square.
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