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Square's On-the-Go iPhone Credit Card Scanner Will Cost $1

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Re: Square's On-the-Go iPhone Credit Card Scanner Will Cost $1

#21

Post by brandonkm »

alastair wrote: post #2

I really like the idea behind Square, but are customers really going to trust a dongle hanging out the end of someone's phone? Whats to stop someone reverse engineering the dongle and creating a spoofed client that just records the data instead of performing a charge?

You bring up a really good point. There is definitely a perception gap square needs to overcome before a device like that is trusted by consumers on a wide scale. When someone buys something from a mall kiosk, the mini credit card machine is probably perceived as more secure and trustworthy than a square device on a iPhone.

Theres no doubt that the concept and execution of square is ahead of the curve, but there certainly exists an array of intangibles that may prevent it from gaining critical mass.

Re: Square's On-the-Go iPhone Credit Card Scanner Will Cost $1

#22

Post by wmf »

jamiequint wrote: post #16

I don't get what Square understands that merchant account providers do not. There are tons of merchant account providers whose best interest is to give you an account, yet they still make you jump through all kinds of hoops to get one because fraud is so costly to them. (Chargebacks are expensive). If it was profitable to make it easy to get a merchant account it seems that this market is developed enough that it wou…

I don't get what Square understands that merchant account providers do not.

They're willing to take a different approach to risk management. AFAIK merchant account providers only deal with really-low-risk customers - established businesses - and they don't have to invest in fraud detection/mangement because they just pass all the chargebacks along to the merchants. Square will be accepting significant risk; when they get a chargeback they can try to take back the money from the recipient via ACH, but in many cases it'll already be gone and Square will have to eat it. We can expect Square to evolve the same hypersensitivity to fraud as PayPal, freezing accounts (aka stealing people's money) at the slightest provocation.

Re: Square's On-the-Go iPhone Credit Card Scanner Will Cost $1

#23

Post by AFerenci »

Traditional credit card processors are able to settle accounts daily. It remains to be seen if Square will offer a similar service. Many established merchants (especially restaurants) desire what is called "real-time billing" or getting cash in the bank once the card is swiped rather than waiting for payment to be deposited or settled.

The other problem is that Square accepts anyone. The reason its difficult to get a merchant account through other payment processors is because chargebacks ARE EXPENSIVE. (payment processors will not accept a merchant that is above a 2% chargeback rate). This means that Square will be susceptible to a larger amount of chargebacks (which means that most of their angel funding will likely be in an escrow account to protect against chargebacks).

Great idea but we'll see how these issues are handled.

Re: Square's On-the-Go iPhone Credit Card Scanner Will Cost $1

#25

Post by jodrellblank »

danielpiqqle wrote: post #24

I am interested in seeing how paypal will move into the mobile space. I think they have a great opportunity as more and more people use multi-media mobile handsets.

A while ago I bought gas and forgot my wallet. I had to call someone to come and pay for me.

If only I could have gone to a website on my phone and paid by paypal. Or phoned someone and asked them to go to a website and pay for me, and the cashier give me the receipt as it happens.

Guess that's as much down to the garage as paypal though, eh?

Re: Square's On-the-Go iPhone Credit Card Scanner Will Cost $1

#26

Post by mbreese »

DenisM wrote: post #4
mprime wrote: post #3

"For just $1, anybody can have the functionality of a full blown credit card reader on their phone." This will not end well.

Why? Anyone can already type in credit card number,ccv,etc by hand for zero dollars - surely it's not a disaster?

Think money laundering, "personal service" industries, etc...

Unfortunately, there is a reason why getting a merchant account is a pain in the ass. The bank doesn't want the risk (for good reason).

The thing about Square isn't the device... it's the service. So when things go poorly, they will be the ones that have to foot the bill. If they open things up too widely, then they will be exposing themselves to huge risk.

Re: Square's On-the-Go iPhone Credit Card Scanner Will Cost $1

#27

Post by danielpiqqle »

jodrellblank wrote: post #25
danielpiqqle wrote: post #24

I am interested in seeing how paypal will move into the mobile space. I think they have a great opportunity as more and more people use multi-media mobile handsets.

A while ago I bought gas and forgot my wallet. I had to call someone to come and pay for me. If only I could have gone to a website on my phone and paid by paypal. Or phoned someone and asked them to go to a website and pay for me, and the cashier give me the receipt as it happens. Guess that's as much down to the garage as paypal though, eh?

It would be cool if the attendant was there and he/she had a paypal merchant account to accept a payment there on the spot where you can log into your phone and send a 20 dollar payment (or whatever the amount) and the attendant will start up the gas machine for you. Paypal could make it so fluid that everyone will be compelled to sign up for at least the mobile app, even if not everyone uses it all the time. Just like everyone really should have a sign on for Skype, even though they might not use it on a daily basis

Re: Square's On-the-Go iPhone Credit Card Scanner Will Cost $1

#28

Post by pyre »

gte910h wrote: post #9
alastair wrote: post #2

I really like the idea behind Square, but are customers really going to trust a dongle hanging out the end of someone's phone? Whats to stop someone reverse engineering the dongle and creating a spoofed client that just records the data instead of performing a charge?

Who cares? This is already a solved problem with credit card laws (the very limited liability you suffer by some random dude stealing the number)

See: http://news.ycombinator.com/item?id=1129797

Re: Square's On-the-Go iPhone Credit Card Scanner Will Cost $1

#29

Post by pyre »

mortenjorck wrote: post #5
alastair wrote: post #2

I really like the idea behind Square, but are customers really going to trust a dongle hanging out the end of someone's phone? Whats to stop someone reverse engineering the dongle and creating a spoofed client that just records the data instead of performing a charge?

A valid concern, but a dishonest merchant can easily enough skim your credit card already. Ever since the proliferation of camera phones, it's not been hard for a bad employee to instantly and stealthily copy your card's information. To step back a bit: I love how elegantly Square has adapted the market's current de facto e-payment option, but I have to wonder if that's really the way forward. If Square is really in…

> Ever since the proliferation of camera phones, it's not been hard for a bad employee to instantly and stealthily copy your card's information.

Not only that, I remember hearing years ago about a scam where a cashier had a PDA and was swiping the cards twice that came through the register, once in the register and once in a card reader attached to the PDA.

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