Square system lets mobile devices take card payments


February 2, 2011

Square is a card reader and app system that allows mobile devices to receive credit or debit card payments

Square is a card reader and app system that allows mobile devices to receive credit or debit card payments

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There’s no debating that credit and debit cards are convenient, but typically the only places that you can use them are in businesses, or via the phone or internet. In 2009 the co-founder of Twitter, Jack Dorsey, set out to change that. He released a beta version of Square, a system that allowed mobile devices to receive card payments. A small card reader plugged into the device’s headphone port, and an app handled all the 1s and 0s. Two years later, Square is out of its debugging phase and available for general use.

The card reader is sent to users free of charge, and there are reportedly no activation, gateway, monthly, early termination or hidden fees, nor is a contract required to use the service. What there are are transaction fees – 2.75 percent + 15 cents for swiped transactions, and 3.5 percent + 15 cents for keyed-in transactions. These fees stay the same regardless of the amount of transaction, and are taken off as the transaction occurs, so no fee schedule is involved. The user pays nothing at all if they don’t use the service.

There is no limit on transaction amounts, and funds are automatically transferred into the user’s bank account after a 24-hour period. The system can also make refunds to buyers.

While Square accepts all major credit cards, the company does have a policy regarding what sort of products it will allow its service to be used to sell. The website states, “Our banks and the payment card networks have also determined that certain transactions, while legal, present high risk exposure to Square, our merchants and their customers,” adding that funds may be withheld from users caught violating that policy. The list of unacceptable transactions includes understandable things like illegal activity, drug paraphernalia and hate products, but also includes greyer areas such as raffles, adult entertainment and occult materials.

Square is compatible with iDevices and Android, but can currently only be used for purchases made within the United States.

About the Author
Ben Coxworth An experienced freelance writer, videographer and television producer, Ben's interest in all forms of innovation is particularly fanatical when it comes to human-powered transportation, film-making gear, environmentally-friendly technologies and anything that's designed to go underwater. He lives in Edmonton, Alberta, where he spends a lot of time going over the handlebars of his mountain bike, hanging out in off-leash parks, and wishing the Pacific Ocean wasn't so far away. All articles by Ben Coxworth

How long do you think it will be before skimmers crack the app and start using this to steal card numbers, and then sell them on the dark market?

Al Katerinsky

At first I was excited to see this. Then I saw what they charge. That is a large percentage. The fact that you have to have the card in hand to swipe it should mean that they are able to charge half of that. I can do the same on my android using the Intuit app by just simply keying in the card numbers, and I pay no fees and a half of a percent less for each transaction, less for some cards. I think that the fee for this is kind of a gouge, it takes away from the consumer in the end since vendors have to charge more to cover the cost of the process.

Paul Anthony

I wanted to check this device out and as there are no initial fees, I went to their web site and signed on. I got the app on my iPhone and three months later am still waiting for the device! Not only has the hardware not been delivered but I can\'t find an email address on their web site to contact them. That is not a very reassuring presentation for a business.

History Nut

I am hesitant from reading the comments to buy this

Richie Suraci

It does take a while to get the Square unit. But it works great. Credit Card numbers are not stored on the smart phone for security. With no fees and a reasonable service charge, Square is a terrific option to have in situations where cash won\'t work--splitting a lunch bill, garage sales, etc. I love it.


I do not believe in illegal actions, but placing your own personal values on a business, well it dosen\'t make much business sense to me. By restricting some transactions, that, well don\'t mesh with your own personal beliefs will only get you hate mail. Other than that I think the product is great and have been following it over the last year or more - Congradulations!



I ordered this for use during out annual fund raiser. It was used with ease and was so well worth it. Next year we are hoping to use 3 devices at the same time to ease in the check out crunch.

Way to go Square, way to go!

Rebecca Sergi
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