The “Square” Creates a Whole New Circle of Credit Card-Accepting Merchants

30 Mar

Imagine driving along the road and seeing a regular, all-American yard sale. Despite wanting to purchase a few Super Nintendo games, a Pete Rose baseball card, and a 1986 New York Mets World Series t-shirt, you don’t have a cent on you. Looks like you’re just going to have to pass on all of these nostalgic goodies.

Well, not anymore. “Square” has created a little device for the iPhone which enables any person with an iPhone and a functional bank account to buy or sell products on the spot. While the idea of paperless spending as already been popularized by Paypal, Square offers an even more immediate and simpler outlet for small-time vendors and whimsical spenders.

Using Square is simple–you buy the little attachable Square device, plug it into your iPhone, sign up for an account on their Web site, swipe your credit card, and verify the transaction. And just like that, money has exchanged hands, and you and your new-found goods are on their way. The site is also very user-friendly. You can track all of your purchases, and even email receipts right after the transaction–which keeps everything paperless and eco-friendly.

Despite the simplicity of the mechanism, there are still a few drawbacks. Seeing as credit card accepting merchants have a 1.6-1.8% fee charge, and Paypal charges its users a 2.9% service charge, Square’s 3.5% tax is, well, exorbitant. Then again, as of now, there is no competition, however, in all likelihood, as members increase, the fee % will drop down to at least Paypal-territory. In addition, the mere fact that Square is in its baby stages paves the way for potential identity theft. Since anyone can use Square, on the surface, you could technically be handing your credit card information to someone who doesn’t just intend to sell you the antiques, flowers, or fruit you thought you were purchasing.

Regardless of the minor shortcomings of the latest payment technology, Square’s device certainly paves the way for the iPhone to become the official phone for small businesses–but also only begs the question: “When will Paypal come out with its own iPhone device?”

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