Square Revolutionizes Mobile Payments for Individuals

Square is changing the way we pay each other.

This past Sunday I was out to brunch with friends, escaping the drizzly weather. Soon enough the check arrived and as usual, one person had cash, everyone else had credit cards and we were working out the arithmetic on a napkin when it hit us: why not pay one person with Square and save the waiter the headache of figuring out who is paying what?

Square is a mobile payment device that is revolutionizing the way anyone can accept payment. Using a Square dongle, simply hook it up to your smartphone, download the Square application, create an account and voila -- you can now swipe credit cards using the dongle, email bills and see the money deposited into your bank account.

It certainly helped that I was sitting at brunch with two Square employees, both of which had dongles and applications all set up, but the process was so simple and so revolutionary that I imagine this Bay Area company is going to have quite a success on their hands.

So how does it work? And is it secure?

First a little background. Square was developed by Tristan O’Tierney, Jack Dorsey and technologist turned glassblower, Jim McKelvey. In February 2009, McKelvey was lamenting to friend Dorsey that he had a lost a sale on one of his art pieces because he couldn't accept credit cards. From there, the co-founders came together and developed a solution for small retailers that cannot afford costly credit card terminals.

Back to the first question of how this newfangled technology works in the first place. The Square dongle that attaches to your smartphone contains a magnetic reader. Whenever a card is swiped, the data on your card is converted into audio. Through the microphone jack, that audio is processed, encrypted and sent over 3G or Wi-Fi to the back-end servers that take care of payment and transactions. Using Square is as secure as swiping your card at a retailer, so there's no need to fear your personal information is in any greater danger.

What's also pretty interesting about this is the analytics Square provides to merchants. You can access how many payments have been made in a day, break out tips and download that information a file to import into your favorite accounting software.

This is one technology that I believe is going to revolutionize payments and it's very exciting to see its development happening in San Francisco. If you'd like to learn more or sign up for an account, visit: https://squareup.com

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