Did anyone else notice that in this picture: http://www.readwriteweb.com/start/images/square_usage_feb10.... The square device is on the wrong side of the iPhone? Shouldn't it be plugged in to the headphone jack?
That's an iPod touch.
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
#32Earlier quoted context omitted.
allow merchants and consumers to accept card payments without a conventional merchant account Isn't that called PayPal? Square is PayPal, but on the iPhone; it doesn't seem hard to understand. And it's surprising that PayPal themselves missed this opportunity, given that they started on the Palm.
My understanding is that PayPal originally was intended to be that and now is the most sophisticated fraud detection and combatment system ever created. > Just as Napster allowed people to directly share music online, PayPal enables people to exchange money instantly without having to open expensive merchant accounts to accept credit cards. Yet to Levchin's surprise, advanced cryptography has had little to do with Pa…
> now is the most sophisticated fraud detection and combatment system ever created.
That's not saying much about fraud detection systems then. Seems like every other day there is some story about someone whose PayPal account was frozen without any chance for appeal or even a solid stated reason as to why it was frozen.
Re: Square's On-the-Go iPhone Credit Card Scanner Will Cost $1
#33$1 + 2.9% :
"Square can afford to give away the dongles because they will be banking 2.9% of each transaction."
Not so cheap.
Re: Square's On-the-Go iPhone Credit Card Scanner Will Cost $1
#34[In that case There is always have a need of trust there, and certainly anyone who understands what reverse engineering a dongle entails also understands why the alternatives are equally vulnerable to fraud.Fraud may occur in that case so be careful.](http://www.soswaterdamage.com)
Re: Square's On-the-Go iPhone Credit Card Scanner Will Cost $1
#35[deleted]
Re: Square's On-the-Go iPhone Credit Card Scanner Will Cost $1
#36$1 + 2.9% : "Square can afford to give away the dongles because they will be banking 2.9% of each transaction." Not so cheap.
What's the typical Visa and MasterCard vig these days? Isn't it around 2.5%?
Re: Square's On-the-Go iPhone Credit Card Scanner Will Cost $1
#37$1 + 2.9% : "Square can afford to give away the dongles because they will be banking 2.9% of each transaction." Not so cheap.
Exactly. 2.9% is very high for card-present transactions where the risk of fraud is lower and 1.9% is more normal. The extra 1% will cover a lot of fraud/chargebacks.
Re: Square's On-the-Go iPhone Credit Card Scanner Will Cost $1
#38$1 + 2.9% : "Square can afford to give away the dongles because they will be banking 2.9% of each transaction." Not so cheap.
What's the typical Visa and MasterCard vig these days? Isn't it around 2.5%?
Visa and Mastercard charge merchant account providers a set percentage (called interchange) and then the providers mark up from there. Interchange is different for every industry because of varying fraud and chargeback rates. Also consider the risk of card present versus card not present (or ecommerce). So I guess this is a long way of saying it depends. For card present situations like Square will always be, you can get an account under 2% if you are in a low risk industry and hammer your sales agent.
Re: Square's On-the-Go iPhone Credit Card Scanner Will Cost $1
#39I 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…
At a guess, they're trying to make it up in volume.
If you're a merchant bank, the smallest thing you can profitably target is a small business, so even a handful of significant bad accounts will do bad things to your bottom line.
Assuming that the potential customers of this service are not trying to commit fraud, and that each one of those customers is doing a relatively low amount of transactions, Square could put this device in the hands of enough people that the aggregate chargeback percentage would still be low enough to be profitable.
Re: Square's On-the-Go iPhone Credit Card Scanner Will Cost $1
#40I 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)
But what about those that use debit cards. Not the same protection, and much more chance for harm.