in Game Changer, Mobile

Jack Dorsey Tries to Change the Credit Card Game

As of today, processing credit cards is just for businesses. And they typically need a certain size to get things started. Well-known Twitter founder Jack Dorsey now tries to change that game with his new start-up Square.
Square allows practically anyone to start accepting payment cards more or less immediately without contracts, monthly fees, or hidden costs. At least that’s the promise. They developed a small, simple dongle that fits into an audio input jack on mobile devices and reads payment cards. This dongle then sends the data to an application that runs on the phone and takes care of the rest.
As a payer, you get your receipts sent to your email or mobile phone instantly and access them securely online. You can also use a text message to authorize every payment in real-time. On the iPhone, the Square app can show a picture of the card holder to the person processing the payment, thus increasing security and decreasing the risk of fraud.
TechCrunch has a short video with Jack Dorsey talking about Square and MG Siegler buying him coffee with his credit card and Square. The first public demo of Square will take place next week at LeWeb.

If you are not convinced, read Om Malik’s excellent piece on why Square exists and who should be worried:

I think that this is truly disruptive. The reason Square exists is because of three macro trends: the pervasiveness of the mobile Internet, the increase in the use of electronic payment systems and most importantly, the availability of low-cost, always-on computers (aka smartphones) that allow sophisticated software to conduct complex tasks on the go.

The marriage of computing and connectivity without the shackles of being tethered to a location is one of the biggest disruptive forces of modern times. It is (and will continue) to redefine business models, for decades. Square is simply riding these waves.