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Square has been called “Paypal for the Real World” and “Apple for financial services,” according to General Manager Keith Rabois, as published on the TechCrunch blog. But is it really all that and a bag of chips, too?
Square is the new (it was just released to the general public, after a pilot run to 50,000 users) credit card reader for merchants that attaches easily to the iPhone and permits small business owners, independent contractors and anyone else to easily accept credit card payments with their iPhone.
This service could be a hit for fundraising organizations (like sports organizations and Parent Teacher Associations), direct sales merchants (the Avon lady or home party entrepreneurs), freelance writers, artists and Web developers, as well as small home contractors, painters, etc. Your lawn guy could even take credit card with his iPhone using Square.
But will it really gain such widespread acclaim as to earn the rightful title of “the Paypal of Mobile Payments?” This finance blogger would like to thinks so.
After all, let’s look at some of the benefits it offers to business owners and shoppers alike:
Benefits of Square Credit Card Processing for Business Owners
- Accept credit card payments on the spot, with no heavy equipment to haul around, or worry about plugging in to an AC outlet
- Know whether credit cards are valid immediately — no storing credit card information in the memory of your credit card machine until you can process transactions
- Encourage your customers to spend more since they can use their charge card
- Low-to-average transaction fees
- Intuitive user interface
Benefits of Square Credit Card Processing to Shoppers
- Use your credit card for purchases anywhere and earn more rewards
- No writing checks or using cash
- No more excuses not to make that purchase you really want
- No more rushing to the bank for cash to pay a service provider
Square Facts and Fees
The transaction fees for using Square (paid by the merchant) are 2.75% each transaction plus 15 cents for each card swipe. There are:
- No initiation fees
- No monthly minimums
- No equipment charges — the card reader is even free!
- No application fees
Merchants must qualify to use Square through a credit check, but the company’s requirements are more lenient than typical credit card merchants or Paypal. According to the TechCrunch article, Square takes into account “the influence a company holds on Yelp, Twitter and Facebook.” So new entrepreneurs with spotty credit or younger entrepreneurs with a short credit history, who have a large social network, a strong website and a name for themselves, have an alternative for real-world credit processing too. (As opposed to just Paypal, Google checkout or another method online.)
Once you download the application on your mobile device and then submit your application, if you’re approved you’ll be sent your free card reader which attaches easily to your smartphone or Apple device.
The mobile devices currently compatible are:
- iPod Touch 2G+
- Motorola DROID and DROID X
- HTC Nexus One, Droid Incredible, Evo, Desire and Hero (w. Android 2. update)
- Samsung Galaxy S series, Intercept
- LG Ally
As long as your phone or mobile device has an Internet connection, you can process payments quickly and easily.
With its accessibility for many small business owners, low fees, and user-friendliness, it’s easy to draw the conclusion that Square may very well become the “Paypal of mobile transactions.” I’ve already recommended it to a few SMB owners I know, and as soon as I upgrade my Blackberry to a Droid, I’ll be very tempted to take “Square” for a spin myself — so to speak.