Twitter co-founder Jack Dorsey is preparing to launch Square, a mobile payment system for small businesses. But can Dorsey do for mobile payments what he’s done for social-networking?
Square, set to launch the first quarter of 2010, markets a hardware dongle for a cell phone’s audio jack. Rather than small companies obtaining an expensive merchant account to process credit card transactions, Square allows shops to “piggyback” on its account. For its trouble, Square will charge a fee from small businesses and a fee from credit card companies.
The service is now in a testing phase with around 300 small businesses in St. Louis, San Francisco and New York.
The similarity between Twitter’s revenue plans is eerie. Square co-founder Jim McKelvey told the St. Louis Post-Dispatch the company is waiting for a signal before setting a course.
“We don’t know where this is going. If done right, the market will tell us what the uses are,” McKelvey said.
Even before it has launched, Square has its critics and competitors. IDC Financial analyst Aaron McPherson called the service “largely just hype.” VeriFone Holdings, a San Jose, Calif. company that already handles the majority of store credit card transactions, plans to launch its cell phone-based PAYware Mobile in January.
[Via SPD]
