Square's IPhone-Based Payment System for Credit Cards | CreditShout

Square’s IPhone-Based Payment System for Credit Cards

By Kevin / August 13, 2009

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It seems they’re always coming out with new uses and apps for Apple’s iPhone. Here’s the latest. Square, a payment processing system, has developed a way for iPhone users to protect their credit card information from getting into the hands of identity theives and credit card skimmers.

How does it work? Basically, a small card reader is plugged into the iPhone through the headphone jack. The customer simply verifies the amount off the transaction on their iPhone, hits approved and the credit card information and transaction amount is sent to Square. From there it’s transferred to the merchant. An email is also sent to the iPhone user, along with a receipt for the purchase. Do to this pretty ingenious new system the customer’s credit card information is never in the hands of the merchant or their employees, preventing the chance of theft or skimming.

For merchants to use this service they’ll need to pay a monthly fee and a percentage of the transaction. It may be a worthwhile cost to many storeowners, however, because they will be giving their customers complete peace of mind. They’ll also be saving money because receipts won’t need to be printed; they’re sent to the customer through email. The merchant also receives a copy of the email that can be stored on a computer database worry-free. Small merchants that operate on streets, such as vendors, will also find themselves able to accept credit card payments as long as they have a wireless connection. This obviously has major advantages for the customer as well. The small card reader is also tiny enough to be carried everywhere.

Currently, this new system is being tested in the New York area and at the Self Edge store in New York City. It’s not yet known when it will be available in other locations and merchants, although iPhone users will most likely be the first to find out.

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