October 28, 2009
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News: iPhone Becomes CC Reader
Technology companies across the globe remain on a mad rush to be the first to develop a sound credit card system that will provide customers peace of mind in knowing that their sensitive information is safe. The race encompasses all arenas of technology including credit card companies, cell phone companies, electronic payment processing companies, and merchants. A new venture by Jack Dorsey, co-founder of Twitter, relinquished his Chief Executive Officer position last year to pursue a new opportunity. The new company, Square-up, has developed a revolutionary electronic payment system. In combination with another technology, the iPhone/iPod Touch, the new technology turns the iPhone into a credit card reader.
The Square technology uses an application along with a small plastic cube which plugs into the iPhone's earphone jack where it functions as the gateway between the merchant and the credit card company. Here's how it works: When the Square is plugged into the iPhone and the card is swiped, it grabs the credit card information and transfers it to the app. The merchant's associate enters the sales transaction amount and the customer uses his finger tip to enter his signature on the iPhone screen and confirms. The customer's email address is entered and a receipt is generated to his email address. The receipt contains all the necessary information for individuals who keep strict accounting records.
For a small fixed fee plus a percentage of the card transaction, payment is made and transferred directly into the merchant's bank account. The entire process reduces time by eliminating a layer in the credit card payment process. iPhone customers will be happy to know that Dorsey is working on a plan that will allow the company to include the cube device which is very economically produced and the application as an added feature free of charge. The company's payoff will come with the earned income from the processing fee.