Apple and Android

It’s hip to be Square

In 2011, it is once again hip to be square. Not in the 1980’s hit song Huey Lewis and The News sense, more’s the pity, but in the mobile banking payments sense, where a 2009 startup, Square, is leading the charge into the mobile payments space. But they don’t have the market to themselves and both proprietary credit card systems and other platform agnostic competitors are ramping up their efforts and their dislike for the company they see as the market leader.

A bit of background about Square. Square is a fantastic little company making waves in mobile banking and the US financials space as the builders of, what effectively amounts to a mobile credit-card payment dongle. The dongle, pictured below, plugs right into any audio socket on any iPhone, iPad and Android device, allowing the user to take payments quickly and easily, anywhere any time.

Square’s website says “Square enables people from all walks of life to accept credit and debit cards. Taxi drivers can get paid quickly without dealing with the headache of printers, pens and paper; a pastry chef that only sells at seasonal farmer’s markets now can accept payments without getting charged a monthly fee; food trucks now have a simple and mobile way to migrate from being limited to cash. You can even have your friend that owes you $20 pay you with their card since their wallet always seems to be empty when you remind them about it.”

Open to the major smartphone operating systems, Square is poised for growth unlike most other companies in its space. And its the ease-of-adoption factor which makes Square in particular so appealing. Anyone carrying an Apple or Android smartphone or tablet product can use Square.

And, importantly for both the money taker and the money payee, Square’s platform is credit-card agnostic. Square is as open as it can be, accepting payments from anyone, anytime, anywhere (in the US).

With any successful rise in an industry, particularly one as hot as mobile payments, there will be detractors. Overnight, Verifone’s CEO, Doug Bergeron wrote an “open letter” to the US finance industry claiming that Square’s services have serious security holes.




That may well be true but what the letter doesn’t say is that Verifone just happens to have its own competing product to Square’s and virtually the same thing can be said about its product offering. There’s nothing to suggest that an app couldn’t be written to mimic Verifone’s too. Verifone’s open letter also completely ignores the fact that a consumers money is protected by the credit card companies where fraud is reported.

Square hasn’t yet made a formal response, they seem, at least for the moment, to be waiting to see what the industry’s and media’s response is. And if that really is their tactic they might do well to wait it out as many social, tech, gadget and mobile media organisations are all highlighting that the ‘Square flaws’ are equally applicable to the company bringing them to light.

There isn’t a scheduled release plan for Square or Verifone to make their appearance in international markets – at least none that have been made public, but one can only assume and hope its a matter of time. With a smartphone market is set to double in size in the next two to three years in the US alone, not to mention global expansion possibilities to high-smartphone adopting nations such as the UK, Japan, China and Australia the mobile payments space is set to only get more fierce and competitive. If the big US players don’t arrive on Aussie shores soon, we may well see a local startup version in the mobile payment space.

Domestically, Australian banks and other financial institutions would do well to be early adopters of this technology. The appeal of doing business with upwardly mobile businesses, being seen as a progressive organisation while appealing to the broadest possible market through platform agnostic mobile delivery is a potential gold mine for growth.

Doing so would dovetail nicely into operational, product and marketing strategies that involve adoption of tangible value-add mobile products and mobile+social marketing integration – as well as creating a new market place with tens of thousands of small and micro-SME’s. And who knows where today’s SME’s will be in ten or fifteen years time. With the right growth strategies and wholesale funding products, the sky’s the limit.


The open letter to the industry from Verifone is below:

An Open Letter to the Industry and Consumers



Let me explain how easy it is to exploit the vulnerability.












Doug Bergeron
CEO, VeriFone