A new application for iPhone, iPad, iPod Touch, and Android-powered phones turns mobile devices into a handheld Point of Sales, letting US-based consumers accept credit card payments from virtually anyone who is willing to get their card out of their wallet.
Mobile payment options are rapidly expanding as consumers gravitate towards a paper-moneyless society.
The trend has been around for a long time but is only now becoming a readily-accepted (and secure) method of payment in the Western world. Consumers in Japan and South Korea have been able to make small payments for goods and services with the swipe of their mobile phones for years and have become heavy users of mobile payment systems.
In the search of a mobile payment system that could work on the go, Twitter co-founder Jack Dorsey started a mobile-based payment company called Square.
Square is a mobile application that lets individuals and companies instantly accept credit card payments via their mobile device. It works with the aid of a small card reading device that plugs into your mobile’s audio input jack.
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The mobile payment system was launched on May 9 after being in beta testing since Jack Dorsey unveiled the project during LeWeb in Paris on December 9, 2009. The application can be downloaded from iTunes or the Android Market and can be used with iPhone, iPod Touch, iPad and Android-bases phones.
To accept credit card payments, users swipe the magnetic strip of their credit card through Square’s device to activate the payment. The information on the magnetic strip is then converted into an audio sound and is processed within the mobile application on their smartphone.
The system works without any contracts or monthly fees. For each swipe of a credit card, Square users (those accepting the credit card payment) are charged a basic fee of 2.75 percent of the monetary transaction plus 15 cents.
An added bonus is the mobile payment system works fast. According to Square CEO, Jack Dorsey, you’ll be able to make a credit card payment on the go in less than 10 seconds.
The device used to make Square payments is currently being given out for free to users who sign up for a Square account in the US. Consumers are able to pick one up from merchants or order them online from the Square website, http://squareup.com.
Mobile payment options are on the rise as people discover the benefits of being able to make easy (and instant) transfers with their phone. According to a May 4 report by market researcher Juniper, the mobile payment market is set to quadruple by 2014, reaching an expected $630 billion dollars in value.
In March PayPal updated their iPhone application to give mobile users the ability to pay for goods and services with a simple “bump” of their devices. The PayPal app upgrade gave users the ability to wirelessly transfer contact information (like the email address needed to send or receive money transfers with PayPal) from one device to another by bumping the phones together. Consumers can also use the app to withdraw funds from their PayPal balance, request money and set payment reminders.
Square’s competitors include the likes of Intuit GoPayment (a Merchant Service for mobile phones), direct payment service Obopay, PayPal for mobile plus a range of other mobile payment services in the mobile payment field such as social payment start-up Swipely.
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