Since May this year, co-founder of Twitter, Jack Dorsey, has been busy with a project about simplifying creditcard transactions. The project is called Square.

More and more payment will be done with ‘plastic’. This is easier and safer than cash money and is used with smaller amounts of money more often as well. The payment options and the monthly costs are making the creditcard an unprofitable way of payment for smaller shopkeepers.

Square is trying to offer a cheap way of payment, without the contracts and monthly servicecosts. The necessary equipment is available at home in most cases. For now the system works on the iPhone and iPod touch, but it can also be used for notebooks. This way paying stuff is getting mobile, and this makes Suqare very useful for on-the-spot payments from people with a small shop.

How does it work?

In order to read creditcards you have to have a dongle which fits in the headphone jack of the iPhone. The customer writes down his signature on the screen and is offered the possibility to adjust the amount of money.

By using a picture or text message to the mobile phone, the customer can be verified immediately. To be able to do this, the customer is required to create an account with his or her personal information.

The system know several internetcomponents to dispatch the payment process. Receipts will sent via e-mail, so there’s no need for a printer and paper. The customers’ personal information can also be recorded which makes it possible to use the system as a ‘customer card’. Returning customers can then be rewarded with a discount for example.

Square promises that with each transaction 1 cent will be donated to a charity, which can be chosen by the customer himself. The system is being tested at a small scale right now. During 2010 the system will probably be more widely available.

Source: Square