Twitter creator wants to give away Square, his credit card payment gadget
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Twitter was just the beginning. After dreaming up the innovative communication medium, Jack Dorsey is looking to revolutionize another core aspect of society -- money.
On Tuesday, Dorsey announced his new start-up, Square, which will let anyone with a cellphone or iPod become a merchant and accept credit card payments.
Square is a small plastic device that plugs into a gadget’s headphone jack. Buyers swipe their credit cards through the machine, which then transmits the payment data to an application running on a connected iPhone or iPod Touch. (Android and Blackberry apps are in development, and computer software will be available later.)
You don’t have to have the Square gadget or app to pay. You just need a credit card and an e-mail address to receive a receipt.
A select few cafes and small vendors are among Square’s first beta testers. Intelligentsia Coffee & Tea in Venice will be one of the first in Southern California, starting as early as next week.
Beginning sometime early next year, Dorsey wants everyone to use Square.
‘I think we’re going to give the Squares away for free,’ Dorsey said on the phone from San Francisco on Tuesday, ‘because they’re pretty cheap for us to make.’
Once the company begins ramping up hardware production, you’ll be able to sign up for an account, enter a shipping address onto the site and receive a device in the mail. Like PayPal, profiles are tied to a bank account.
Dorsey envisions the service replacing virtually every cash transaction. Let’s say a friend owes you $30 for dinner last week, but there’s no ATM in sight. Grab the Square device from your keychain, plug it into your phone and tell him to pay up.
Then there’s the untapped market on Craigslist. The free and ubiquitous classified ad site ‘is doing more transactions than eBay today and has no inherent payment mechanism,’ Dorsey said. ‘It’s a huge market for us.’
The payment system is secure, Dorsey said. Transactional data is safely encrypted, and the credit card info is never stored on the device, only passed along, he said. Signatures are drawn with a finger on the touch screen.
Buyers with a Square profile can set their photos to display on the vendor’s screen to thwart identity thieves or daughters with a penchant for ‘borrowing’ plastic. (It won’t stop your twin sibling from charging things to your card, though.)
Even the e-mail address and phone number a customer is asked to put in during the sale is invisible to the seller. It’s only used to transmit the digital receipt, which can include a logo and links to the retailer’s website or Twitter page.
A cool, high-tech toy for free. What’s the catch? Well, Dorsey has a hidden agenda, albeit one shared by many -- he’s sick of cash.
‘I, for one, hate getting change,’ Dorsey said. ‘I just can’t stand it.’
The current credit card system isn’t without its faults, either. ‘I get so annoyed when people give me a paper receipt for something that was like $5,’ he said. ‘There’s nothing that I would do with that receipt.’
His solution is Silicon Valley’s hippest new start-up: Square. Its e-mail receipts save trees; its charitable donations save the poor; and, gasp, it even has a business model. ‘We may charge $1 for the app,’ Dorsey said in an e-mail.
-- Mark Milian