It’s Hip to Be Square: Processing Credit Cards On Your Phone
By Tahera
It’s safe to say, of late, you can do just about everything but brush your teeth with an iPhone. You’re always wondering what else the creatives at Apple are going to think of next. Well, the next marvel is credit card processing using any credit card with your phone!
In December 2009, Jack Dorsey, the founder of Twitter, launched a new application that allows iPhone users to process credit cards using their phones. Under a new venture, called Square, Dorsey hopes to take credit card processing to a new mobile high.
To use the credit card processor, the user needs to attach a specialized dongle to the headphone jack of the iPhone, (it even works with an iPod touch, as it uses the wireless function to process the transaction). Then, using a specialized application, the user can swipe a credit card through the dongle and process the charge. (Food for thought — if it uses the headphone jack to attach to...will it soon be available for any mobile phone that uses wireless?)
As Dorsey plans to give the actual dongles away — You have to ask “how is he going to make money through this?” Well it will be through the application required to process the credit card transaction. App downloads are a big business in the Apple world, and Dorsey has been quoted to say he might charge $1 per application download in order to make money on his Square idea.
The guys that will benefit the most with this type of application are small businesses that are often forced to go on a cash basis for sales, as they cannot afford to pay the transactional costs associated with having a card machine. Think street vendors, seasonal businesses, or businesses that do not have a traditional brick and mortar location. The attic clearout in the next street garden may be Square run!
- As with anything, each comes with its fair share of disadvantages or drawbacks.
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