Square is an attachment for your iPhone that lets you swipe credit cards. Combined with their software and payments infrastructure, it allows anyone to accept money quickly.It’s definitely a cool product. It’s a tiny device that converts the magnetic signals from your credit card into an audio tone, which feeds into your iPhone headphone jack. The software then converts those tones back into a number for processing. The demo worked. Technical glitches aside, it was a pleasurable experience. The phone processed the payment quickly, accepted my signature via my finger on the screen, and it emailed me a beautifully designed receipt.
If you have purchased anything in an Apple store recently, you’ve seen they employee similar technology. Store clerks walk around with iPhones that have bar code scanners and credit card readers. But that’s where the similarities end and where I think Square breaks down.
- How many people really need this? I guess I don’t know much about the market, but I can’t imagine that many people out there want to accept payments via credit card and can’t
- Why doesn’t Square use the 30 pin connector instead of the headphone jack? Seems like the current device will break off easily, and simply isn’t as reliable
- The email I got for my payment was a link to an online receipt. Huge fail. I want the full receipt in my inbox so it’s searchable. Why do I have to go online to see what I bought?
- There is no barcode scanner. Adding that would allow a whole other set of features such as inventory management and analytics
- The device is expensive. I don’t mean Square, but the iPhone itself. Do I want to hand someone my iPhone and have their grubby paws all over it? Probably not. If this is something I use once a month, then maybe. Although then I’m probably not going to carry Square with me. And if I am someone who uses this constantly, seems odd to build it on top of such an expensive, fragile device. A standalone credit card reader costs as little as $99. Seems like a better price point for a business who needs multiple devices, which might need to be replaced often.
- Fraud. Paypal’s core technology revolves around fraud detection, not the payments themselves. Can Square do the same?
- Fees. Merchants pay up to 3% in credit card fees. This is fine because they are a retailer with large markups. It’s part of the cost of doing business. If Square is meant for more personal transactions (I’m not sure if it is) then these fees are not acceptable. I’m not going to split rent with my roommates this way if I lose 3%.
I’m interested to see who actually finds that Square solves their payment needs. To me it just seems like a cool gadget