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Summary:

Square Cash requires only an email address and debit card to work. The company has stripped out all of the other steps that complicate other mobile payment services.

Square officially took the wraps off its planned peer-to-peer payments service Square Cash today, and the results are quite impressive — it isn’t just creating a PayPal clone. It’s streamlined the transaction to a bare minimum of two elements: both the payer and payee connect with an email address and a debit card.

Here’s how it works: A payer simply creates an email from any mobile, web or PC client with the email address of the payee in the “To” line, cash@square.com in the “CC” field and the dollar amount in the subject. Then the payer hits send. That’s it.

Square CashIf the payee is already a Square Cash customer then he or she will receive the email notification and find the money transferred from the payer’s bank account in one or two business days. If either the payee or the payer — or both — aren’t yet Square account holders, then they would receive registration prompts asking them to enter their bank debit card numbers. Once that number is entered, their debit accounts will become automatically linked to their email addresses through Square. All further transactions require nothing more than sending and receiving email.

When Square decided to create this service it wanted to replicate the same simplicity of design and ease of use of its other payment products, said Brian Grassadonia, head of Square’s Cash team. That meant it wanted to strip out all of the steps that complicate other peer-to-peer payments services: no multiple verification steps, no entering checking account and routing numbers, no passwords and — most significantly — no need for a separate financial account to act as repository for all transactions. With Square’s approach, the consumers use the basic financial and online tools they already have, Grassadonia said. (Square CEO Jack Dorsey will be talking about the power of design at our RoadMap conference in November in San Francisco).

For now, Square isn’t charging any transaction fees for the service. “Right now we’re focused on creating the best possible experience for the consumer,” Grassadonia said. “We believe the best way to do that is to make it free.” As Square layers on more functionality to the core peer-to-peer payments service, the company will look for ways to monetize it, Grassadonia said.

Of course, the simpler a payment’s design, the more prone it is to abuse — in this case getting access to a consumer’s checkbook would as easy as hacking an email account. Grassadonia said Square is putting the same fraud prevention tools in place it uses to secure its business mobile payments networks. The first line of protection is an SMS alert system that notifies an account holder any time a payment is received or sent, giving the user the opportunity to suspend transactions. Square is also imposing a $2,500 limit per week on transactions.

Correction: This post was updated at 11 PM on Tuesday to correct the CC email address to send Square Cash payments. Instead of pay@square.com the email address is cash@square.com.

  1. George Poenaru Tuesday, October 15, 2013

    I consider a danger solution. What happen if a hacker manage to rely on your SMTP email. Or send fake headers ?

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    1. They’ll get an SMS and I suppose will have to figure out how to handle the situation. I hope nobody gets hit with overdraft fees over that sort of thing. Debit cards typically don’t have the kind of protections like credit cards.

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  2. Wasn’t similar email based transfers already there ?. With WellsFargo’s SurePay etc.

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  3. Interesting solution, but I do think consumer confidance in their security model might be their biggest obstacle. As stated in the article, the simpler the system the easier it is to abuse.

    As for myself, still prefer BitCoin for sending money. More secure and more anonymous.

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  4. Similar to PayPal, Chase QuickPay, PopMoney and another one..

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  5. Venmo is way nicer.
    Unfortunately Venmo was absorbed by the evil empire.

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  6. Reblogged this on Niki.V.all.ways.My.way. and commented:
    =) if you didn’t know that the impending doom and gloom of the “default” that there are not options, well, good news. the economy is an arbitrary system, the one we use is one of many, we just need to make some new decisions as we watch this one fall under the weight of its imbalance. it will be nice to watch the default! but, honestly, I think they just think they are going to repeat the drama of “the fiscal cliff” and what a let down of a plot that one was!

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  7. Gee please phish me! I was reading along, trying not to like what I was seeing and thinking well maybe this could be improved but it looks OK. Then I saw this:

    “If either the payee or the payer — or both — aren’t yet Square account holders, then they would receive registration prompts asking them to enter their bank debit card numbers. Once that number is entered, their debit accounts will become automatically linked to their email addresses through Square.”

    This looks like an open invitation for criminals to phish their targets to go for their bank account information. The ways this service could be abused should give all of us pause.

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  8. Threat to paypal!

    More surprising stories here about technology and the people behind them! — http://www.londonreal.tv/silicon/

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  9. Great idea, but if someone steals my phone and emails money to themselves, I don’t think an SMS notification (sent to the same phone) is going to be much use by way of security….

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  10. Amit Goel, CEO KF Sunday, October 27, 2013

    There is a significant payment tech and innovation. To summarize, Square cash and numerous other technologies that are shaping payments http://letstalkpayments.com/all-9-payment-enabling-technologies-22-illustrative-companies/

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