As the story goes, the idea for this new service came about when Twitter inventor and co-founder, Jack Dorsey, happened to see a street artist which he liked. Wanting to support him Jack found he didn’t have cash. The artist did not have a way to swipe a credit card.
With that idea in mind, a company was formed, co-founded by Jim McKelvey and Jack Dorsey. Money was raised (mainly from Digg’s Kevin Ross) and the prototype was unveiled to the world in beta trials at the end of 2009.
SquareUp.com enables merchants to accept payments via credit cards through their smartphones and tablets. No electricity is needed and it can be done any place where cellular reception is available.
By signing up with the company, merchants get, free of charge, an attachment which plugs into the earphone socket of their smart phones. The card is swiped through a slot at the top of the attachment.
When activating the program (as an app) on the smartphone or tablet, the process becomes very simple and self-explanatory. Input the amount, let the client sign with his finger and you get the approval very quickly. What’s more, you can send a receipt immediately to the customer’s e mail. A map helps you track where you have used the device recently.
As with any other credit card service, service fees apply. The current rate is 2.75% on a swiped transaction (with no additional FEE) and 3.5% + 15¢ per keyed-in transaction.
Who would use this?
On a Plum TV interview, Jack Dorsey put the example out there of, the Babysitter. Everyone from Babysitters to street vendors can find value in this new product, and he was just referring at the time to the recipient. Jack continued on to talk about how much convenience it makes for those of that simply do not carry cash and still want to purchase, support or partake in activities that until now had no method of payment besides cash, which less and less people carry.
What Can This Mean For Small Business?
Although most online businesses have methods for sending and accepting payments online, these systems are certainly not fool-proof, and often users in different countries may suffer from restrictions or high fees just to accept incoming funds. This has actually created quite a gap in money exchanges carried out online because just as with instant messengers, there are just so many to choose from, that users will select the one most convenient and manageable for them.
However, this does leave the aforementioned gap, some users simply cannot accept the form of payment that you may be restricted to.
If consumers suddenly had a way to accept credit cards on the spot, how much would this change how small businesses function? How much would this actually benefit those who are struggling to make a break into the world of bigger business? Who can really benefit from on the spot credit card charging access?
- Street Sellers
- Flea Market Vendors
- Catering Companies
- Musicians
- Artist
- Charities
- Small Venues
- Craigslist Sellers
I think the point is made. Those who previously had no other method to transfer funds, or the ability to sit down at a computer and manage their accounting from there, can now use their smartphone to manage funds literally on the go.Â
Although service fees do apply, most small business or vendors will not mind the loss of required transaction funds, since some fee has always been associated with credit card processing and the fact that without the SquareUp application, they would have never been able to initiate the transaction in the first place.
Sources: