Created by Twitter co-founder Jack Dorsey, Square is a credit card processor that you can attach to your Android, iPad or iPhone that allows you to swipe credit cards on the fly. It has given a lot of small business owners and independent sellers access to mobile payment that, in the words of Square, is “simple, fair and transparent.”

How does Square work?

The secret to Square’s success and value is its access to piles of data collected through the processing of credit cards. Currently, most of Square’s revenue is from the 1 percent cut they take from each transaction – and with an estimated $30 billion in transactions, Square is making big bucks.

I came across this neat service one day at my home when a small business owner I had called over was done and asked me for my credit card. He pulled out his smartphone and swiped my credit card across this little dongle connected to the headphone jack of his smartphone. He then passed me his phone and I typed in my cell number (I could have provided an email address instead), and it texted me a link to my receipt which I was able to easily print. Super convenient and easy! No need for a printer on his part. Immediately I decided to look up this great service to find out more.

Square launches several new products

Despite a loss of $100 million due to the delay of its public offering in 2013, Square has managed to shore up its losses and bounce back by securing a $225 million line of credit, developing their business model, and launching new products.

The company has launched Square Capital, which allows eligible small businesses access to funds that they can then use for hiring, buying equipment, etc. The firm’s fast moving transaction process (they can send loans the next business day) as well as their open-mindedness when it comes to unconventional business concepts sets them apart from their competitors in the financial industry. They also offer other products that ease transactions such as Pickup, which allows customers to order online in advance, and Register Offline, which allows sellers to accept credit card payments even when temporarily offline. Square also features products that aim to lighten the e-commerce management load, one of which is Inventory Tracking, a free service that lets sellers track item stock seamlessly.

27 Comments
  1. That is so cool. I just hope it’s as secure as it sounds. As you know, there are many terrible people nowadays who would hack and crack the most “secure” devices. As these are related to credit cards, I don’t know if it will succeed in the long run.

  2. I’m pretty hyped out about this. The convenience of being able to swipe a credit card whenever you want to, wherever you are just seems too good to be true. No need to find the nearest ATM.

    However, as convenient as this is, security can be an issue here, as well as possible spoofing of credit cards. Square’s creation, while not very big, does jut out quite a bit and it dosen’t look that convenient to swipe a card easily. Either way, being able to do it on the comfort of your couch is awesome, I’m watching this development.

  3. This is so cool! It’s a brilliant invention and it looks like it’s very convenient to use. This is perfect for people who are always in a rush. I do hope though that they also have prepared solution for possible hacking (like what inkyuboz said) as this can greatly affect their business should this kind of problem arises.

  4. I never heard of this until now. This is definitely convenient than the regular payment method where mos of the time I have trouble getting my information across one of those pads by the register. Recently one of those swipe pads could not register my information from the touchscreen and it really pissed some people off. It was not my fault this thing thing not recognize anything I was pressing. I see this as a great way of payment- I hope no one runs with the cashiers phone though.

  5. This looks revolutionary. My parents usually have credit card billing problems because the seller doesn’t swipe it properly and the bill gets charged two times. Square could prevent that issue. But, I would not really trust their security. I would consider more feedback before using them. However, I wish this becomes a standard in the coming years.

  6. I love how simple this product is for both the consumer and the business owners. I can see people starting work from home jobs all the way to having garage sales while using this product to facilitate transactions. Absolutely amazing!

  7. Provided that the data remains as secure as it has been to this point, I see no downside to this service. Small business owners are no longer limited to accepting cash, which opens the market of everything. Consumers can now easily reward small businesses and stimulate growth in the economy. And of course Square is making bank with the rise of its service. Great technology and great article.

  8. I love these! When I go to little restaurants, I love to see them use an android device to take credit cards. This makes it feel so much smoother.

  9. I know a lot of folks who do business at craft and vendor fairs. Nice that they now have some options for receiving payments for their products. I know the old method of filling out an order form, giving the customer their products and crossing your fingers the payment cleared once you got home used to stress my friends out to the point, most of them just stopped taking credit.

    • This is exactly what I was thinking. I knit and something like this would be *amazing* for accepting payments. I fear a lot of people would be too afraid to use it, though. I know my mother would not ever dream of swiping her card through someone’s phone for payment.

      I really hope this catches on so that it’s common enough to be less scary for the average consumer.

      I’m really going to look into this to boost my craft fair sales.

  10. Yeah it would be nice and convenient to have something to swipe your credit card. I always shop online so its pretty annoying to have to keep typing credit card numbers and expiration date. This could be the next big thing but I do hope that hackers or identity thieves won’t exploit this new technology.

  11. I bought something from an electronics shop in an airport last year and they used a similar device. So I assume there are other brands on the market, it actually failed though and we could not put the transaction through. Not the best example of my first experience of this kind of device.

    I hope they make more robust products, it can be a real time saver.

  12. I don’t think I will trust this device. I mean if ATM machines can be hacked I doubt this thing will be that secure and the fact that you’re going to use it via your phone is just not cutting it for me. With all that powerful phishing virus and softwares out there hackers are going to have a blast with this.

  13. This is an amazing new product to be honest. It’s an extremely way for small business owners to complete transactions without having to buy anything extra than their smartphone and the dongle. Even for someone who does odd jobs like mowing others lawns for example, can get paid without having to force the payee to withdraw any cash.

  14. I find this item very useful. I am currently using it for my online business and work from home business. For me, using the Square is very useful and it makes it easier to accept all card payments. I would recommend the Square to everyone who runs a business from home.

  15. I think Square is a great tool for smaller businesses. You can request a card reader online for free–I have neighbors who have used them for garage sales and bake sales. Many local cafes around me use Square too. I like that I swipe my own card, sign on a screen, and am emailed a receipt instantly. I feel more connected to the process. I’m looking forward to seeing what the company does in the future.

  16. Square seems to be promising, and in the future it could lead to paperless and cardless transactions. We won’t need to use the ATM or carry our credit card, it would all be in our phone. It looks like in the near future, we could do away with wallets and purses, and just carry a smartphone or a smartphone watch. Only thing I am worried about it for the moment is the security it offers, considering that my phone which may be hacked, is less secure than a credit card and a POS terminal.

  17. As awesome the concept may seem, people may create or find exploits within the system. If that’s true, peoples stolen credit card could be at risk of having money taken from them. But if the system truly is secure, this will be a very quick and slick way to process payments.

  18. This is just amazing, especially for small business. Many of the local shops that I go to use Square, and it is very convenient for them to use. The payment method is very easy to set up, and requires no extra equipment. Alongside NFC in phones allowing tap to pay and the development of tap to pay technology in general, our society is becoming a place where physical money is no longer needed as much as it used to be. I think that it is truly remarkable how far our technology and currency have come.

  19. This is really awesome and exciting. You’ve always got to be wary about security though, let’s hope that it’s top notch and we don’t need to worry about it too much. This seems like it could be really popular in the future given the time and effort.

  20. We have a burrito truck outside of my work and they use one of these and that was the first time I’ve seen one. I was honestly a little hesitant at first to slide my card, but after I did I was amazed at what had just happened. Although, he did accidently charge me $66 for that burrito instead of the $6it was supposed to be haha, but he ended up giving me the difference in cash. Either way, I was amazed with it.

  21. I think this is awesome and we’re definitely gonna see more of this in the future! I hope there aren’t no problems with security since this is pretty easily hackable.
    It’s a neat idea and I can’t wait to see how it’s gonna affect our life in the future since this is gonna be much easier for the people who own a smartphone.

  22. Another advancement in technology, I see. This is neat but like everyone else has to think, how secure is utilizing this method to pay? It does seem like the Square company is thriving with their profits, so that must count for some user trust. Maybe I’ll see one of these devices soon, if not just for the thrill of remembering I saw it here.

  23. The first question I had was about the offline mode. Is Square the only payment method that allows offline mode? When we pay with our cards at the store, there would be a phone connection to facilitate the payment. If the phone line is busy or not working, customers can’t pay with cards.

    A while ago we were introduced to Near Field Communication as a more secure payment method using the mobile phone technology. It was something we could use with the WiFi. Even that we haven’t gotten used to. I find myself wanting to learn more about those methods before moving on to something totally new. I am not entirely aware of how these new payment methods differ from one another.

  24. Oh boy this is legitimately scary. The opportunities for credit card fraud and false transactions alone are red flags for me. I hope they put in some preventative security measures, because if they only put those at the transaction or tail end, a lot of people are not going to bother with it.

  25. I wouldn’t mind having this device. If you own a business or just selling things in general for profit, this is perfect. Hopefully these things don’t screw up the payments and charge too much from the payee, that could lead to problems. It’s like having our own merchant account.

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