Square Launches Payments System That Makes Registers and Wallets Obsolete

Square has launched a new cash register for merchants and a new mobile wallet for consumers to make paying for cups of coffee and other retail goods extremely simple.

Jack Dorsey, Square’s CEO, said today during a live stream of the press conference at TechCrunch’s Disrupt event: “Only six percent of commerce has moved online. This is as easy as buying a song on iTunes.”

Dorsey said that there’s a lot of talk about mobile payments, but other systems are addressing only one piece of the ecosystem. Square’s solution addresses the whole picture.

The company first started with the original Square dongle, which allows consumers to use their smartphone or iPad to accept credit card payments once they’ve plugged a Square dongle into the headphone jack. Today, it announced the two other critical components for it to work: the register and the consumer-facing app.

First is the “register,” which is actually an iPad that comes with Google-like analytics, allowing merchants to monitor what’s going on, such as what percentage of coffee drinkers also bought biscotti. Second is the consumer-facing component, which Square is calling the Square Card case, which is an iPhone application.

“There’s a lot of talk about mobile payments today. We think we have an easy solution. It doesn’t just go after the parts, it goes after the whole,” Dorsey said.

This vision was laid out extensively to All Things D months ago in an interview with Dorsey, who also co-founded Twitter.

The system will initially launch with 50 merchants across the U.S. in several cities, including St. Louis, Los Angeles, Washington, D.C., and San Francisco.

So far, Square has gained a tremendous amount of traction in a short time. It has shipped 500,000 readers, and so far this month has processed $1 billion in gross payment volume.

Now it believes it can leverage that volume to see mass adoption by consumers.

“We want to take away the clutter and the paper, and get rid of the loyalty cards and get rid of the receipts,” Dorsey said.

It starts with the user’s card case, which must be set up in advance with a user’s credit card information. From the card case, the user will be able to see the menu of the restaurant, cafe or spa they are visiting. Users can click to order. When they go up to the register to pay, the consumer doesn’t hand over anything but their name.

“It’s really, really magical. It’s something that makes the experience awesome,” Dorsey said.

The simplicity of it might be the hardest part to sell.

Consumers and merchants will have to believe that using Apple products can be as safe and secure as big enterprise-grade systems that everyone is accustomed to seeing.

Square will also have to go up against a ton of other providers coming down the pike, including solutions from PayPal and payment giants such as Visa, MasterCard and American Express.

The San Francisco-based start-up recently received an investment from Visa.


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