• Susan Dickenson

‘Square' Offers Free, Easy way to Try Mobile credit Card Processing

JACK DORSEY, THE creator of Twitter, tweets to his 1.6 million followers as @jack. His Twitter bio reads "Creator, Co-founder and Chairman of Twitter; CEO of Square." The "Square" refers to a new application and a little piece of plastic, both available for free, that let anyone accept credit card payments via iPad, iPod Touch, iPhone or Android devices.
     There's no card-reading equipment to purchase, no setup fees, no contracts, no monthly fees. If you lose the plastic reader or don't use it for days, weeks or months, it won't cost you anything. All you've got to do is go to squareup.com and ask for it.
     Here's the catch: you (the merchant) are charged 2.75% of the purchase price, plus 15 cents to swipe the card. For small retailers, therein lies the reason for or against sticking with your current credit card processing service provider. However, it offers an alternative in the event you're selling in a different venue, a backup in case the power goes out, and it certainly merits watching in the event the Square's fee structure becomes more competitive.
     Square first caught my attention a couple of weeks ago when I was halfway listening to one of the morning shows while getting ready for work. A commentator kept promising a story "coming up" about a little white quarter-size square that would revolutionize retail. Unfortunately, he spent the rest of the morning promising the story instead of reporting it.
     I forgot about the Square until I saw technology writer David Pogue's article (A Simple Swipe on a Phone, and You're Paid, New York Times, Sept. 29, 2010) a few days ago. Pogue is as smitten with the device as the numerous @square Twitter followers who use words like "dogsimple," "brilliant" and "irresistible" to describe it.
     Here's how it works: The Square plugs into the headphone jack of your iPad, iPod Touch, iPhone or Android and has a slot where you can swipe a card. Let's say you're selling from a pop-up booth in the town square that you've set up for the town's annual fall festival. As Pogue describes it:
Mobile credit card processing     You snap the Square reader into your phone or tablet. You tap in the amount of the purchase; it could be $1 for a yo-yo, $25 for a box of old records or $12,000 for a used car (there's no maximum amount). You type a description if you like, and maybe even take a photo of what you're selling. Now you swipe the customer's card, which may take you a couple of tries. Your happy customer signs the phone's touch screen with a finger (a coming software revision will make this step optional). If you like, you can tap in the customer's e-mail address; the receipt is then sent automatically, complete with a little map showing exactly where the transaction took place. To sign your name, you scrawl with your finger where it says "sign here."
     The application also lets you accept payments without the card - by keying in the number, expiration date and security code - at a higher fee (3.5%). You can add a tip, accept and track cash payments, and download a spreadsheet of your income for the day.
     "You've just accepted payment the way they do it at Apple stores: wirelessly, without a cash register, using a hand-held Internet- connected gizmo," wrote Pogue. "Your biggest problem may be overcoming your customers' skittishness; people don't trust what they don't understand."
     And it's not just for retailers. Those who've played with the technology envision it as a collection vehicle for budding entrepreneurs, hot dog vendors, babysitters, cab drivers, yard-salers, Girl Scout cookie vendors, parking attendants, fundraising endeavors, etc.

Here's the catch: you (the merchant) are charged 2.75% of the purchase price, plus 15 cents to swipe the card.

     The company and other proponents of the technology say the system is secure. Eva Norlyk Smith, writing for CreditCard- Guide.com, said Square hides card information from the seller and does not reveal phone number or e-mail address, even though it automatically sends the buyer an e-mail receipt of the transaction.
     Signing up for Square involves providing your bank routing and account numbers so your money can be deposited. Only the first $1,000 of each week's receipts go immediately to your bank account. Anything more than that is reviewed by the company's auditors and it could take as long as 30 days before you see the rest of the money. But, said Pogue, that's just for first-timers. "The more you use the service without incident, the higher the company will raise that $1,000 threshold. In fact, if you're willing to share more details about your business with Square upfront, they'll raise that threshold from the start."
     Square, now fully launched, has been beta testing since late last year. There have been some glitches and delays, but the company says everything's fixed, and the new and improved version is ready for the masses.
     If you decide to give the Square a try, let us know how it goes.

Susan DickensonSusan Dickenson | Editor in Chief

Susan Dickenson is the editor in chief of Home Accents Today, where she has spent more than a decade covering trending topics, best practices and news items pertaining to the manufacturing, retail and interior design segments of the home furnishings industry. A graduate of UNC, Dickenson spent 15 years in the Washington, D.C., area, writing and researching in both the public and private sector. After relocating to her native North Carolina in 2003, she freelanced as a writer of general interest, business, garden and home items for local and national publications before joining Home Accents Today in 2006 as retail editor.

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