Square - My thoughts
This is a new feature of this blog where I highlight new startups that I find interesting along with their products. Square Inc. gets the honors of being the first startup I highlight on this feature.
Square Inc. is a San Francisco-based technology company that is releasing a revolutionary mobile technology that will vastly improve the world of payments. This innovation, while can thought of as sustainable technology, will take the mobile payment a step further by enabling anyone with a smart mobile device to capture credit card payments anywhere - quickly and safely. The technology being introduced is Square – a system that turns any phone into a mobile point of sale terminal.
Square utilizes a proprietary card reader that attaches to a mobile device through its 3.5mm audio input jack. This device then converts the credit card information stored in the magnetic strip of a card into an audio signal that can then be interpreted by the software application running on the mobile device. Upon swiping a card, the application runs through the standard credit card authorization process, similar to one that can be found in a conventional credit card processing point of sale (POS) system. The payer can confirm, and sign for the payment using the mobile phone input device once authorization has been completed. No more paper receipts, instead receipts are automatically generated and either emailed or sent via SMS to the payer along with the exact location of the transaction, and even a picture of the merchant.
I found out about square via Kevin Rose who I believe is an investor in Square Inc. Founded by Jack Dorsey, the co-founder of the Twitter, Square Inc. has been developing this system since February 2009. According to the Square Inc. website, Square was invented out of frustration. They realized how difficult process it is for small merchants to accept credit card payments at events like outdoor art fairs, garage sales. Until now there had been very limited solutions to this pain even though analysis of the payment industry showed that more people paid with plastic. Therefore, Square Inc. started developing a prototype back in February 2009. The system is now in limited beta but it is posted on their website that they expect to release a final version to everyone in early 2010.
The interesting thing about Square is that it is a unique product that offers a lot of customer value. If this were to be plotted in a two-dimensional graph with uniqueness and customer values as the vertical and horizontal axes respectively, Square will be positioned at the top right – very unique with tremendous value. However, with the popularity of smart mobile devices, competitors have released mobile payment processing applications. So even though Square has great value, it is truly not in a Blue Ocean - it is still fighting in the bloody waters for mobile payments.
For more information on Square, check out the website www.squareup.com
