A few thoughts on Square payment system

I used Square this weekend for a small moving sale. Square is (in my case) an iPhone app with a little credit card reader you plug into the earphone jack of the phone that you can then use to swipe credit cards. There were a couple of categories of potential transactors as you might imagine:

  • People I knew, who trusted me (neighbors)
  • People I’d never met, who were tech savvy
  • People I’d never met, who were not as tech savvy

So, the neighbors also were fairly tech savvy and it didn’t seem a stretch that something like this might be possible. They may have seen such an application e.g. at the Apple Store where wireless PDA-type credit card readers are commonplace. They were also quite happy to give it a try and have me email them a receipt. The other types of people were more interesting.

The responses were fairly predictable – one person asked how does this thing work? Though really, most people seemed to think the technology made sense and it was possible; credit card swipers in stores are understood by most to be a telecom-like device. One older gentleman asked me if I was going to store his credit card number – a good question, of course I said I never see the number it gets sent straight to the processor, and if anything bad happens he can call the credit card company of course. (Not something the merchant really wants to be talking to the buyer about though at the best of times) This same person wasn’t sure if they should sign their name or something else, but I said just use your finger to sign your name and that was okay. The email receipt worked well, though another person asked if I was going to send them some email later — I said no. Etiquette about who enters the email address remains unresolved though mostly it’s me except in just one case where they typed it in.

Overall, a good experience for me and the buyers – some issues that will clearly come up from these initial observations: as is usual with payments, there will be issues around trust of the payment mechanism as distinct from trusting the merchant (and especially if that is an unknown). Credit card safeguards already have a lot of mindshare so that helps – but as Square extends to less tech/finance-savvy customers it’s likely they will have to get their name out there to be seen as a trusted payment brand as well.

Good luck to Jack Dorsey, Keith Rabois and the rest of the Square team with that – it’s a very cool concept and as usual the payments space could use some more disruption.