Bear's Log

A lot of activity today about Jack Dorsey’s newest venture since Twitter called Square (http://squareup.com ) that allows anyone with an iPhone to handle credit card transactions and while I am all for anything that makes a POS transaction faster or smoother, it just seems to be a step in the wrong direction if you want to enable mobile processing.

Let me explain after I clear up a couple straw-man arguments I am already seeing in the blog comments.

Firstly this will not enable more credit card scanning thefts simply because the thieves have already had access to many smaller and more subtle devices to scan cards and it is often the human in the chain of activities that is where the theft occurs, not the POS devices. Also, remember that people who have been sniffing WiFi signals for years capture a lot of credit card numbers from folks who mail their data to support email accounts, who shop at sites that don’t use SSL certificates for their checkout pages and by simply hacking the back-end servers.

So yes this is a nifty hack to enable a non-magstripe-reading device (a mobile phone) to receive the track 2 data from a credit card but it’s not something new for the crooks - they already have the credit card system by the short- and-curlies.

In Asia and Europe they already have methods of letting people pay via the mobile phones that are always with people but this type of payment method just hasn’t caught on in the US because I think that here our mobile phone providers are driven into the ground any hope that we would ever trust a billing item appearing on our phone as valid. Heck, most of that died on the vine when 900 numbers were all the rage and people routinely opted out of allowing them - so yea, I don’t see that happening soon.

Rather this is a step sideways for allowing person-to-person payments as the user is still tied to the credit card industry IMO. Instead of enabling individuals to setup accounts with their service and enabling micro-payment transactions to vendors we end up with more of the same - just wrapped in a web 2.0 delivery device, the iPhone.

• Converting the magstripe data to audio – not new
• Hand-held POS devices – not new
• Third party agents for credit card payments – not new
• Being the first to tie it to the iPhone and selling it to trendy hipster boutiques? Priceless.

Or rather however umpteen millions of dollars he got for something that’s already been done before.

(edited for grammar - thanks Reid!)