Jack Dorsey played a major hand in the way people connect with one another with the founding of Twitter in 2006. Now, nearly four years later he wants to overhaul how people make purchases with his newest project, Square. Square is at present working to produce a very small scale credit card terminal that can plug into the headphone jack of an iPhone. The idea is to make completing credit card transactions easier for everyone involved, both the payers and people receiving payment.
The concept for the company came after fellow Square chairman Jim McKelvey after the glass artist was unable to make a $2,000 sale as a result of credit card troubles. They got to work on considering ideas that would allow businesses and individuals to accept cards via the iPhone and decided upon a credit card reader intermingled with a cell phone.
McKelvey and Dorsey’s concept is not entirely novel though, VeriFone Holdings Inc. came up with a similar idea called PayWare Mobile for the iPhone but unlike Square, it would require a merchant account.
Square Inc. has its own merchant account rather than requiring one of small businesses, giving them more power to monitor risks and frauds.
"We're trying to build a utility that scales not just to someone selling coffee in a store but also someone selling their couch or buying a MacBook Pro on Craigslist," Dorsey said of the product.
Using the "square" is relatively straight forward. A card can be swiped through the device that will then read the credit card number and turn it into an audio signal that can be transmitted to the iPhone through the jack. The iPhone than decodes the data and the buyer can authorize the purchase on the iPhone’s touch screen. The credit card information will then be wiped out.
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