VeriFone Punches Square, Launches iPhone-based Card Reader

15 Comments

Ever since I wrote about Square, the new electronic payments startup co-founded by Twitter inventor Jack Dorsey, I’ve been getting calls from folks expressing a wide range of opinions as to the likely success (or failure) of the young company. In my post I singled out VeriFone and Symbol Technologies as two companies that will be especially disrupted by the rise of the iPhone (and iPod touch) (s aapl) as they shake up the enterprise mobility market.

VeriFone (s PAY) is happy to disrupt itself, or so it seems. The San Jose, Calif.-based company today announced PAYware Mobile. The service, which includes VeriFone’s mobile payment system, also includes a card reader disguised as an iPhone sleeve that can be used by merchants to swipe cards and accept payments. The product is likely to ship in January 2010.

A VeriFone spokesperson, in an email, took thinly disguised digs at Square when he said that “[T]his is no fob that can be easily damaged” and “Nobody seems to know whether Square is secure or what the fees are with their system. The VeriFone system is definitely a grown-up payment device.” There is one aspect of Square, however, that sets it apart from its competitors: its use of social networking tools and virality. It is squarely shooting for person-to-person commerce.

Also of note is the fact that Incase is rumored to be making payment sleeves with similar commerce functionality that fit around iPod Touch devices and are being used at Apple stores now. There are many other iPhone-based payment solutions that are currently under development. As I’ve said before, the iPod Touch is Apple’s stealth weapon and is causing disruption across the industry — including in enterprise mobility and in expensive hardware.

15 Comments

Krishna

Got tired of waiting months and months for Square and their low limits. I bought Verifone from Apple store instead. Does just what I need to sell my paintings at farmers markets.

Justin E Harris

Due to the fact that square is like FREE (according to the iPad app that was released today Apr 3 2010) its not hurting them. I am not paying the fees and stuff VeriFone wants me to pay. Its crazy! If its FREE its me!

Jose

Hi,

But the Square plugs into the phone jack and it’s compatible beyond the iPhone.

José

Rachel Q Maniago

“Also of note is the fact that Incase is rumored to be making payment sleeves with similar commerce functionality that fit around iPod Touch devices and are being used at Apple stores now.”

Chiming in from Incase here to correct the information in the article above–although we did create the holster that supports the new EZ Pay touch device currently in use at the Apple Store, we did not create the actual device itself. Just wanted to clarify our level of involvement.

jenkins

I have a less favorable view. This is an idea chasing demand. And, if i recall, Mr. Dorsey was let go from Twitter well before it blew up. Why? My guess is that it had to do with competence.

Libran Lover

“There is one aspect of Square, however, that sets it apart from its competitors: its use of social networking tools and virality. It is squarely shooting for person-to-person commerce.”

A Paypal (or similar) phone app will work MUCH better for person-to-person transactions than a physical Square that needs a physical card swipe.

dbreunig

I like the thinking behind square: creative and strategic in a dusty stagnant market. I love their Mint-esque transaction receipts.

Two things here:

  • The beauty of Square’s 1/8th inch dongle is that it can be used on a desktop, laptop or iPhone. This is huge for small businesses and even echos the iPod Touch strategy: don’t lock yourself into one market.

  • Unless I read wrong, Square doesn’t have fees. Their means of revenue, however, is only limited by their creativity. I look at Square (and Dorsey’s past) and see the perfect location-aware social network. Making a purchase is an incredibly passive means of checking in; they’re capitalizing on existing behaviors, not attempting to create new ones (cough-mayors-cough). I can see an easy exit for Square if they create a system for capturing offline consumer and small business transaction activity.

bryce mcdonnell

This is yet another amazing step getting commerce out of brick and mortar stores and into a more distributed, more efficient, infrastructure. Even if the offering is marginal (and I’m not saying it is), the idea is progressive.

If the Internet brought us e-comm (electronic commerce), perhaps I can be the first to coin the term mo-comm? :)

Comments are closed.