Steve Jobs' decision to include a new product in one of his Apple stores is the ultimate stamp of approval. Today (Tuesday), he gave that rare approval to "Square," a plug in credit-card reader from one of the co-founders of Twitter, Jack Dorsey. This could be just the boost Square needs to bring its mobile payments system to the mainstream, as the competition heats up.
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Square is like PayPal for mobile devices. Users plug in a square plastic device into their iPhone, iPad or Google android phone. Swipe a credit card through the reader to charge a credit card any amount of money. It's secure, easy, and designed for small businesses — or as the company has said, everything from bake sales to bakeries. The vendor pays 2.75 percent of each transaction, far more affordable than signing up with a credit company to accept traditional credit card payments.
The company has been on a roll — it just closed a new $27.5 million funding round and announced it's processing $1 million in payments each day. COO Keith Rabois has said the company's expected to process $40 million in sales in the first quarter of this year and is signing up 100,000 merchants per month.
Now, Dorsey is hoping to accelerate those numbers with its placement at Apple . The device is selling for $9.95 at the store, but when users sign up for an account they'll get a $10 credit on square. That means Square is taking a loss on each plastic device in order to get them into new vendors' hands.
But Dorsey and Square are facing a slew of competition. Google is going it alone — working with MasterCard and Citigroup to make Square unnecessary. And there's some talk that Apple's also looking to make its own play in the mobile payments business. That's not all — PayPal and Intuit , maker of bill system Quicken, are also working on their own mobile payment options. And next year a new mobile payment system called Isis, which works with Verizon, AT&T, and T-Mobile, is planning to launch.
As the list of companies jumping for a piece of other mobile payments indicates, there's no question that the market will be huge. The question is: will Apple's endorsement help this new sleek device win the market, or will the slew of competitors make gains with the explosion of the iPhone's rival Google Android devices?
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