Twitter Founder’s Credit Card Device Faces Challenges
Twitter co-founder Jack Dorsey started public testing of his new mobile credit card processing service, called Square, a couple of weeks ago amid a flurry of publicity. Square provides users with a small card reading device that attaches to an iPhone’s audio jack and processes the transaction information after a card has been swiped through it. Since Square’s launch, however, the mobile credit card processing landscape has changed and a new competitor has appeared on the scene.
PAYware Mobile, which also targets small businesses with lower card processing volumes, will beat Square to market. The service is offered by a well established industry player – the San Jose, Calif.-based VeriFone Holdings.
While Square offers its service with “no contracts, monthly fees, or hidden costs,” it is uncertain how it can cover costs by allowing “piggybacking” on its own merchant account, or an unknown alternative. Typically, merchant account fees can run in the range of 2 to 4 percent per credit card transactions, in addition to other processing fees. PAYware Mobile does require a merchant account, as do other companies that already have mobile payment systems.
