Mark this in the ridiculously cool, we're almost in the future column. Square is aiming to be the new way to take credit card payments and it works on your Android phone today. Simply download the Square app, plug in the dongle into your 3.5mm headphone jack on your Android phone, swipe the credit card through, and you get paid. Square is aiming big and looking to take down entrenched merchant accounts, their system comes contract-free without monthly fees. Users will only pay a very competitive transaction rate. We imagine many tech savvy store owners will make the switch. Check out the video after the jump! [square]


Reader comments

Square brings credit card payments to Android


Didn't watch the video- yet, but this seems just a bit too - open.

My fear: what's to stop somebody from taking a day off, jacking- oh- 50 credit cards, charge them to the max, then hop on a plane to the Caribbean and transfer those lovely new funds on his way through security?

I'm actually curious, because i'm sure i'm not the first person to have that fear...

Well if someone has the skill to jack 50 credit cards in one day - they will max them out at the walmarts and convenience stores. I doubt the will take the time to set up 2 bank accounts - a smartphone account - and a merchant account for credit cards to defraud a bunch of folks who were lax enough to let their credit cards get jacked.

Right now, I take cash or checks for my photogrpahy work. I can now take credit cards on-site with my Droid. People may worry about security - I mean someone is scanning a card with a hand-held device. Just like you see on the news, where they steal your credit card numbers. But, with most credit card complanies only holding you $50 liable, there is a bigger risk writing a check. Then they have your name, address, bank name, account number, routing number, signature, and sometimes your phone number and drivers licence number. So, my $25 baseball package will cost me $0.75 to charge on a credit card. I can handle the 3% loss, when I would have probably lost the sale otherwise.

Not very good for merchant accounts. I just went to sign up, until I read the agreement. They hold 2 weeks worth of charges in your account that you have no access to. This is so they can keep it in reserve in case of chargebacks. Now I don't know how many businesses can afford to charge customers for 14 days and receive no money back, but I certainly won't. I would rather keep that reserve in my bank, thank you. And there is no interest earned on the money they hold.

I don't like the physical design, seems just ASKING to get knocked off and break your phone in the process.

I'm also surprised that the headphone jack can be used reliably as an input device. Simply plugging or unplugging my headphones starts the music player on both my iPhone and Nexus One 50% of the time.

For people who sell things at trade shows, cabbies, or any mobile service this is quite cool.

All I know is I am going to sign up for this when I get home. This device/software alone is a game changer when my family holds yard sales or when I sell energy drinks from my cubical at work.

No more will I have to hear "I don't have any cash," now I can reply with "I take Visa and Mastercard"

And the rates are comparable to PayPal. . . but I get a cool dongle for free!

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Just a quick point of information for those interested.

After watching the video I was interested enough to go to their website and read through all the information I could find there. Buried in their forum is a post that explains that there are $100 per transaction and $700 per week maximums. (Funny, because in the video, the guy selling the couch is asking $1000)

I was really interested initially, but at this point it is not suitable for many service businesses where charges are much greater than that. Medical professionals, attorneys, contractors, etc. And, while they say they can up the limits, I and many like me would need those higher limits immediately.

It seems like this is more like paypal was initially (except you get a cool dongle). It's really designed for ultra small businesses and individuals not people trying to accept significant charges.

Square website says that transaction limits will be raised based on their infrastructure growth, risk assessment and your transaction history (my paraphrase).. I think this is huge.

I'll tell you what, I'm not giving anyone my credit card if I see you pulling out a cellphone to swipe it with. I'm not alone here either, who in their right minds is going to pay you that way? It's an identity stealing trainwreck waiting to happen!

#1 LUMMIX READ THIS: Credit cards have nothing to do with identity theft, they can be a result if someone opens one with your identity but they are not the cause of identity theft.

#2 You are not liable for unauthorized charges. Maybe I have awesome cards but I really don't think so. My wallet was stolen and three separate cards were used and I was reimbursed 100% (plus when I found out who it was and threatened there on probation a$$ with the police they reimbursed me too so I actually profited).

#3 Scanning a card into a phone can only take the information stored on the magnetic strip, it may surprise people that it is the same information that is read and stored by any card possessor. What does it matter if it is in a phone, and please stop with the someone could hack a phone. Yes, and they could hack a credit companies database (already happened) or a department store (already happened) or an employee could steal and sell info from a company (happened). Just check your statements and there is no worry.

I'm not saying it isn't safe, it very well could be. My problem is how are you going to convince anyone, "I'm not stealing your credit card numbers." Most people aren't as savy about this sort of thing and it scares them to death to pay at a real store, none the less let a guy with a van in the alley swipe your bank card to make a sale. It'll have to catch on with respectable results before I buy into it.

$700 per week? I have clients who go through that in one transaction. If a taco truck doesn't exceed $700 in a week, there's issues there too.

But if you are a small business willing to cough up over 3%, and not willing to deal with actual credit card processors who average 2.3% (restaurant industry) by all means go right ahead.

They claim that the setup is PCI-DSS compliant, so that is a plus. That essentially means that the swipe is transmitted directly to Square's credit card processing system, with all the data encrypted. PCI-compliance is a standard created by VISA and adopted by every credit card company (MC/AMEX/Discover etc...) They developed the standard in order to reduce credit card fraud. Layman's terms: a merchant cannot write down, print out, or save your credit card number, cvv number, or issuing zip code. VISA and banks may charge fees, and the government can charge fines of up to $5,000 (US) for non-compliance.

And btw, those credit card swiping machines... older models, USB ones in particular, do NOT encrypt the data. Many merchants are now upgrading their systems with encrypted swipers, but not ALL of them. Those that do not will likely pay more per swipe.

I was sooo suprised to see this! Seeing it in action was soo much fun! Look foward in using it with my new Android and FREE cell phone service. Thanks for a great service, keep it up!

I couldn't stop laughing when I started reading the comments here about fear of theft and "My problem is how are you going to convince anyone,"

"I'm not stealing your credit card numbers."

My Thought, why would you be giving your card or even cash to someone for a product or service that you didn't wan't, ask for, desire to have? Is it really likely "that person" is gonna rob you? If they do well your a fool and your still gonna get your money back!

I'm personally excited as a fat kid with a cupcake to use this product although it will not suit all my need but...

Example: I come to your house. (because for some reason you chose me) I'm hired to Fix your computer, Install your fancy new HDTV or even install your home security system.... So now I have provided a professional service and all you have is a check that I hope is good?
I'd Rather pay a fee to know I'm getting paid instead of trying to find your bank and see if they will actually cash the check.

P.S. The information read and stored off your card by EVERYWHERE you use oh guess what Name, expiration date, and the 16 digit card number! A lot less "savvy people" have EASY access to that info every single day.