Mobile payment services are growing in popularity as smartphones, particularly the iPhone, extend the geographical range where transactions can take place. SquareUp is envisioned for mobile merchants such as artisans in a street fair or a person-to-person transaction (e.g., Craig's List). Wired magazine suggests SquareUp has the potential to be disruptive.
There has been unprecedented demand since the May announcement so the readers have been tough to get. Also, the volume of transactions has resulted in issues with fraud and chargebacks. Square limited the transaction to $60 in June until the credit risk infrastructure became more solid sometime in August it appears. See June 18th letter. [Update - deliveries of the reader have picked up substantially in early October]
The potential market is huge and SquareUP could be supplanted by RFID-enabled payment services on smartphones. Bloomberg is reporting that AT&T, Verizon, and T-Mobile are teaming up with credit card companies to offer contact-less payment systems. (link)
Square Card Case (LA Times 02Nov11) - no need to swipe - just know your name
Visa backs Square (LA Times 29Apr11)
How will it work? What is the future for Square? Jack Dorsey returns to Twitter full time... (LA Times 29Mar11)
Square's mobile credit card reader easily hacked, says VeriFone (LA Times Mar 10) There were security concerns early in the beta testing so I'm wondering if this is a new vulnerability that is being reported. Update Square has responded ... Square answers VeriFone's accusations on security of mobile credit card reader (LA Times Mar 10)
Twitter and Square’s functions 'could merge’ (Oct 30)
Jack Dorsey Explains How Square Uses Your Twitter Activity As An Anti-Fraud Test (see the video)
Get Ready For A Big Funding Round For Square
Square Now Processing Millions Of Dollars In Mobile Transactions Every Week (Techcrunch 9Nov10) - all that commotion on shortage of readers this summer - turns out just 50,000 users. But now that they have the device Square reporting millions of dollars in transactions weekly.
Want to know what SquareUp is tweeting about? Go to the Twitcaster feed on Squareup. On 03Nov they had an employee pizza party and advertised for support jobs.
What are venture capitalists tracking about Squareup? See the Tracked.com feed.
Square files lawsuit against co-inventor - name left off of patent
Jack Dorsey believes mobile banking apps will take awhile to take off so credit card payments for forseeable future (see WSJ video)
Square Valued at $240 Million (LA Times)
GoPayment Taking on Square with Freemium Reader - transaction fees similar to Square
A Twitter guy takes on big banks (Fortune)
The latest commercial titled "Smooth Swipe". Maybe because they are having swiping issues on the reader - at least on Droid.
Latest version of SquareUp iPhone app: V1.3.2 updated October 28, 2010 - bug fixes for transaction errors
V1.3.1 (tested on IOS 4.0) updated October 9, 2010 - bug fixes for specific devices
V1.4 (tested IOS 4.0) updated December 8, 2010 - account section, send receipts via SMS, bug fixes
Square is using a soft rollout so there are many limitations prospective users should be aware of. Here are some of the major ones:
Transaction limits - they may be negotiable IF you can reach someone. See complaints in Square Forum. [As of July those limits have been eliminated]
US sellers only (see FAQ post)
Square reader delay - still
very slow delivery of the card reader you need to get the discounted
transaction rate. Those who ordered on May 11th supposedly received
notice of shipping in early September (see Squareup support post and post). For those who have received the card reader, you'll need to insert a non-conductive washer so that the device will actually read on an iPhone 4. See the Squareup support home page for latest status.
Square is a scam? There was some initial concerns about identity theft with Squareup earlier this year (see Square support post).
Late September update: Square support page says it is rapidly working through the backlog. Upward of 50,000 readers are expected to be issued this year [no confirmation on this number yet]
iPhone 4 Antennagate and the Square Reader? The iPhone 4 antenna and the old style Square reader caused interference. Square has redesigned the Square reader for iPhone 4. (link)
Square only supports iOS and Android. If you have a Blackberry, the encrypted ROAM audio plug-in has been introduced.
Here is a list of alternative mobile payment services.
Here is an interesting comparison on various credit card services for the small (occasional) business which Square is targeting. This is the crux of the Square business model - no monthly fee but perhaps slightly higher transaction fee - net expense to the low volume business is lower.
SquareUp has updated its rate structure. The proposed plan was a flat 2.9% without a transaction fee when the SquareUp beta began in December 2009. The announced rate starts as low as 2.75% plus a 15 cent transaction fee.
The rates are attractive for the occasional seller who don't have to worry about a monthly or minimum fee. The transaction fees are also competitive.
The Square application can be downloaded from the Apple App Store or Android Market.
Square offers the following product/service on the SquareUp: