credit card reader posts

Last week at Macworld 2010, I had an opportunity to chat with Jim McKelvey of Square, the company that wants you to be able to take credit card payments for ... everything! TUAW has covered Square before, mainly discussing the big investors in the company including Jack Dorsey of Twitter and Digg's Kevin Rose.

Beginning in April, Square will be giving away a small card reader that plugs into the headphone jack of your iPhone, iPod touch, and eventually just about any device that has a headphone jack. You sign up for a service, buy an app to go on your device (it's estimated that it will cost just US$1.99), and then you can start taking credit cards for all of those daily transactions where you normally exchange cash. Square makes their money off of a small percentage fee, and even donates a penny to a charity of your choice with each transaction.

McKelvey was taking donations for the American Red Cross at the Square kiosk in order to demonstrate how the system works, and it was impressively simple. Square was created for the purpose of making it easy for anyone to take credit cards without the expense and hassle of setting up a merchant account with a bank and/or purchasing an expensive card-reading attachment for their iPhone.

The software captures signatures, pictures, and even the location where the transaction took place. My receipt for the $10 donation to the Red Cross had an embedded Google Map showing that I had made the purchase at Moscone Center. Check out the video for my interview with Jim McKelvey by clicking the Read More link.

We apologize for the low quality of the sound on this video.

The Mophie Juice Pack and Juice Pack Air have been popular iPhone cases / external battery packs for a while. Now we're hearing that the manufacturer is going to add a credit card reader to its lineup of accessories.

The Mac Observer is reporting that Mophie will provide a credit card reader similar to the one used at Apple Stores, and possibly supply software to manage transactions as well. The company hasn't divulged its detailed plans for the device, but is expected to provide more information during CES 2010. The annual consumer electronics show in Las Vegas will run from January 7th through January 10th.

A number of other companies, including Square and Verifone, have jumped into the iPhone credit card reader market, and it is logical that a company with iPhone accessory manufacturing experience would join the party.

Credit card transaction software for the iPhone platform made a big splash in 2008, but it appears that Apple's validation of the concept of using the device as a way to capture retail transactions has really opened the doors. The EasyPay checkout system (at right) used at the Apple Stores has garnered a lot of attention from customers who have asked if Apple would actually market the system. With the proliferation of third-party solutions, it's likely that Apple will stay out the market.

If you were Jack Dorsey, one of the co-founders and current chairman of Twitter, you'd want to think about something else big to follow up on your huge success.

While it doesn't sound like anything groundbreaking, Dorsey's new company Square is developing a tiny white cube (see photo above) that plugs into the headphone jack on either an iPhone or iPod touch. The cube is a credit card reader, something missing from all of those credit card apps currently in the iTunes App Store.

The Square iPhone Payment System consists of the reader and an app. After a card swipe, the customer uses a finger to sign the iPod touch or iPhone, one of the participants in the transaction enters the customer's email address, and a receipt with the location of the transaction, the signature, and other standard information is emailed to the customer.

While most online journalists are anticipating that this device and software are going to be used in retail (can you say Apple Store?), I think Dorsey has bigger ideas - let's face it, the guy doesn't think small. So why not make it possible for anyone with an iPhone or iPod touch to be able to accept credit cards for payments? Word has it that the card reader's manufacturing price will be as low as US$0.40, which means that Square could give away the readers and still make money on the transaction fees.

[via Engadget]