Mobile Payments: Accepting Credit Cards On Your SmartPhone

September 12, 2011 at 9:00 am 4 comments

A new type of technology is happening in the tech world.  What is it?  It is simple but is helping out thousands of businesses.  Its being able to accept credit cards on your smart phone, without any credit card fees or monthly fees.  One new company is doing this.  The company is called Square.  The company was co-founded by Jim McKelvey and Jack Dorsey in 2009.  Jack Dorsey is also the founder of Twitter.  Square has developed a small “dongle” that hooks into your phones headphone jack.  This “dongle” is for swiping of the credit card.  It works with their iPhone, iPad and Android apps.

The app is very easy to use and sign up.  You simply add a bank account to get verified, and you can start taking cards!  Now you may be asking, how does Square make money off this?  They charge only 2.75% of each transaction.  Most credit card Point of Sale systems charge a % per transaction and also a monthly fee.  Square does not charge a monthly fee.  Now you may ask, how do people sign for their payment?  They simply sign with their finger and can have their receipt emailed to them or via a text message.

Square’s iPad app offers the most features, since it is geared towards more permanent businesses that do not move around.  The app for the iPad lets you add preset items, tax and tip.

There are now other competitors such as Payware by Verifone, and MobilePay.  All of these companies really have opened a new industry and is definitely going to make the credit card payments industry a lot more interesting.  This new technology makes it so much easier for a business to take credit cards.  All they need is a bank account and a smart phone.  Square and the other competitors will all mail you their dongles for free!

I hope everyone found this post interesting!  Feel free to add comments and remember to take the BlackBoard quiz.

-Mike Jahn

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4 Comments Add your own

  • 1. Anonymous  |  September 12, 2011 at 10:50 pm

    I almost feel paranoid when I say this, but that ‘dongle’ kinda scares me. Businesses that keep your credit card info on their personal iphones and ipads? I don’t think I would ever let someone scan my card with their phone. Who knows if they would delete it or if they are even held accountable if your credit card gets compromised. I think it was an interesting article, but I think this trend is one I will skip.

    Reply
    • 2. nkdunca  |  September 16, 2011 at 7:56 am

      CC info isn’t stored in plaintext, from what I can tell. Like in a real store, It is probably transmitted using SSL and decrypted on their end.

      Reply
  • 3. Anonymous  |  September 16, 2011 at 11:10 am

    I think the dongle is actually really neat, it also makes it easier to be able to pay for things online and not won’t have to put all your information in, just a swipe of the card and its done, they should have made an EASY button for that one.

    Reply
  • 4. Credit Card Processing Rate  |  September 17, 2013 at 3:42 pm

    I blog frequently and I genuinely thank you for your content.
    This great article has really peaked my interest.
    I will book mark your site and keep checking for new information about once a week.

    I opted in for your Feed as well.

    Reply

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