Is Square a sham or the next big thing?
Seems everyone is falling for this but me. I had to look at the TechCrunch video presentation of Square few times and I still do not understand what Square is up to.
Is it a clearing house, a merchant provider, payment gateway, a mobile POS – read Point Of Sale 
, a technology platform or all the above? I don’t have the answer and my guess is Square is exploring all possibilities.
Whatever is shown on that short video presentation is not an easy form of payment process. It took a couple of minutes to pay for a coffee as it takes less than 10 seconds 
to do the same at any Starbucks. What happens during rush hour when 60 people need to pay for coffee? Expect a 120 minute wait to process payment!
What’s the point of a $200 iPhone PoS (Point of Sale – don’t want any confusion here) when you can process credit/debit payment on a virtual terminal at $0 additional cost?
I read somewhere it’s a huge opportunity for pop and mom kind of business, eBay sellers, Craigslists transactions, farmers and so on.
First I believe they could all accept credit cards today if they wanted to. There is a gazillion solution out there for them.
Second do you think those really want to be exposed to chargeback, fraud, IRS, sales tax and potential liability for identity theft?
Third – credit/debit card sales is not CASH in da pocket. Often I shop at Coconut Grove Organic Farmers Market and let me tell you – they don’t like/want your plastic. Cash allow them to live. They already struggle, take it away from them and they die.
So what am I missing? Should I buy the concept because Jack Dorsey – Twitter co-founder- is behind it? Enlighten me.
Tags: dorsey, iPhone, mobile payment, payment, square, transaction, virtual
This entry was posted on Wednesday, December 2nd, 2009 at 1:46 pm and is filed under Apple, Economy, Entrepreneur, Geek, Telecom, USA, iPhone. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
10 comments to “Is Square a sham or the next big thing?”
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Great post Florian, and your points seem legits to me. BUT, there’s a need for that, they just need to figure out where their niches are, maybe it’s painters, maybe it’s just eBay or Classifieds professional sellers, maybe it’s just you and me. I am 100% sure they’ll figure that out
I am just blown away by the concept, there must be a way to make it big.
Its not often I disagree with you but I got to say I am 100% behind Square. I can think of 100 addressable markets here right now.
I am selling a sofa on Craigslist, guy comes to collect with no cash, I can now take payment, I don’t have to go through the pain of opening a merchant account, I really don’t want one, I am not a merchant just a guy selling a sofa.
you can take this model to anything in my opinion.
I agree with you it was slow but I think these guys aren’t after Starbucks or anything like that plus if they get the fraud stuff correct the savings could run into billions.
How can you have the Square Point of Sale if you did not open an account previously with them? Are they going to send iPhone jacks to every citizen? What is my credit card statement going to say when I buy from a Square merchant?
Who says the transaction is charge free? I haven’t read that anywhere.
It’s easy to say HUGE, GREAT, WOW but I don’t think we have the whole picture.
I’d love to understand more of the concept. In any case the transaction shown on that video is ridiculous IMO.
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Square is another over-hyped project that will fall short.
I’m with Pat on the potential but on the fence on re: followup.
Isn’t the iPhone demo just the jumping off point? Dorsey et al are trying to disengage cards from traditional hardware in real-world payment scenarios. Is it such a big jump to see all kinds of devices supporting Square – from iPhones, to MP3 players that hook up to wifi, specialised readers that jack into music systems of high-end connected super cars, to laptops and even traditional POS points?
I guess the real questions are can trust be won in the hearts and minds of consumers, what partnerships can Square ice on devices and how aggressive is Square’s expansion plan?
Square will win adoption when people forget about the device and just use as a utility.
I always appreciate someone who is counter to the herd. In fact Fred Wilson at http://www.avc.com had a good post about that very subject today.
I do however disagree with how you are looking at Square. I would take a step back and say a guy like Jack who can attract cash and team in a space as large as credit cards will make something big.
I have a feeling in the next few years square will look a lot different then it does today, in fact I bet that dongle will be gone sometime in the near future as well.
If I could put money in Square I would, just based on team and market size.
It’s an interesting challenge. The idea has some merit, but in many ways using Paypal to handle these transactions mobile to mobile is more practical for real ad hoc situations… and doesn’t require the seller having the relevant dongle and handing over his iPhone for the purchaser to sign on.
I know in the UK there have been trials of stored value tokens that communicated via RFID etc … would be interesting to see if the Square idea is going to be tied to this iphone/audio jack solution or if it’ll expand to support bluetooth pairing, RFID devices (like Poken for instance) that enable these transactions to happen with high trust, low delay and minimal/zero fraud risk but get over a tipping point so they are commonplace rather than novel.
Oh, and how does this deal with things like the UK chip+pin cards?
@Alexia You might be right. But I’ve been processing cc on my phone for over a year. Tons of iPhone apps do the same http://www.techflash.com/seattle/2008/12/Turn_your_iPhone_into_a_credit_card_terminal_with_a_4999_application35979579.html
The only game changing would be pricing per transaction if Square succeeds to offer low rates.
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