Lauren Goode

Paying With Square’s New Mobile-Payments App

Over the past week and a half, I’ve purchased seven cups of coffee, three bags of beef jerky, two cookies and a pastry. With my smartphone.

It’s not a sustainable diet, but that’s what was available at the relatively few shops around San Francisco and New York City that are accepting Pay with Square and PayPal’s mobile app.

In case you’ve missed it, there’s a battle brewing over the future of mobile payments — that is, the ability for consumers to ditch the leather wallet and purchase things with their mobile phones. Companies like Google, PayPal, Square, wireless providers and credit card companies are debating various forms of mobile payment technology.

But in the battle over who gets to control your digital wallet, it’s important not to forget the consumer experience. Is it really that much easier to pay with a mobile phone than it is to just pull out cash or a credit card?

That’s what I set out to find this week, mainly using Pay with Square.

Square is a company known for creating a device for small businesses that plugs into an iPhone and can read a swiped credit card, but the company recently renamed and relaunched its app for consumers. Now called Pay with Square, the app works only at stores that are using Square’s register system for the iPad. Currently, around 75,000 merchants across the U.S. are accepting payments via the Pay with Square app.

In my experience, Pay with Square proved to be an easy, enjoyable app to use to purchase things using my smartphone — though it won’t be an everyday app for me until there are more businesses accepting it.

The free Pay with Square app works with iPhone and Android phones. It used to have a wallet-like interface, but now it simply lists nearby merchants, and has a rotation of featured businesses at the top of the page.

I first used Pay with Square at a coffee shop in San Francisco. I had to link the app to my credit card account, and then upload a picture of myself; otherwise, I wouldn’t be allowed to pay. Square says this provides a layer of security on top of other standard security measures it puts in place, alongside the security your credit card company provides.

Of course, a customer could upload a picture of their cat or something, and use that as their Pay with Square image. It’s up to the merchant to decide whether it’s a good idea to accept payment from someone whose photo doesn’t align with what they look like.

Then, on the coffee shop’s page within the app, there was the option to auto-open a tab for payments. Once I indicated in the app that I wanted to open a tab, my name and photo appeared a few moments later on the cashier’s iPad register, and the cashier was able to tap on my name and charge me.

Square has been touting the idea that this app actually allows for “hands-free” payments, which means a user shouldn’t even have to take her smartphone out of her pocket in order to pay, provided that the auto-open tab is turned on. I had mixed experiences with this at shops in New York.

One shop I bought coffee at didn’t see my name right away, even though I had turned on the tab in the iPhone version of the app. I tried to buy another item using the app on a Samsung Galaxy Nexus Android phone, and my name didn’t appear at all on the list of customers in the store.

But at another downtown coffee shop I was able to walk in, place my order and say, “Charge it to Lauren Goode” — without taking my phone out of my pocket — and the transaction was completed in seconds. This worked well on both iPhone and Android.

The app has a new tilt-to-map feature that I like a lot. Tilting your smartphone at an angle turns the screen into a full map, with little red pins showing where Square-friendly merchants are. I could also tweet from within the app that I was at a shop and paying with Square, text-message the same notification, and email the store’s link to a friend.

One part of the app that I found lacking was the amount of information that some merchants list on their pages within the app. Some show addresses, phone numbers, business hours and full menus. But a couple of Square-friendly venues in the app only listed their business phone numbers or addresses, so I had to exit the app to run an additional search and find out what the business actually sold.

This past March, online payments giant PayPal introduced PayPal Here, a Square-like dongle for small businesses to accept credit card payments on a mobile phone; PayPal also has a mobile app that uses location services to recognize where a customer is. PayPal already has the advantage of a massive user base of over a hundred million and, unlike Square, it is available in international markets.

But PayPal’s triangle device for payments still hasn’t been fully rolled out yet, so locating businesses where I could test that in conjunction with the PayPal app was challenging. The company says it’s still in “beta,” so it’s unclear how many merchants are actually using the triangle.

So that’s how I found myself buying beef jerky from a merchant amid a row of warehouses in Brooklyn on a rainy day. The founder of Kings County Jerky used to use Square, but he is now using the PayPal triangle.

Once I arrived, I opened the PayPal application on my iPhone. It recognized my location and listed a couple places nearby that would take my money via my PayPal app.

Since data service on my phone happened to be particularly bad in that area, I initially had trouble dropping the digital pin within the app that’s supposed to let the merchant know I was there. The merchant also had to reboot his phone once to process the payment on his end.

But once I switched over to Wi-Fi, I had four options for paying him: Pay directly from my PayPal account through the app; handing him my credit card, which he would swipe through the PayPal triangle; and scanning my credit card. The last resort would be for the merchant to manually enter my credit card number into his phone, though he would get charged a slightly higher fee for processing my payment that way.

Mobile connection issues aside, paying through my PayPal account on the app was relatively quick and painless.

In terms of loyalty rewards and discounts, mobile payment companies are trying to make paying with a smartphone compelling, but I haven’t been using the apps long enough to glean the rewards. Square, for example, gives merchants the ability to offer purchasers 10 percent off transactions just for being repeat customers, and while Google Wallet is currently only available on five Android smartphone models, the company has partnered with name-brand retailers to offer small promotions to app users.

Paying with Square was an easy way to pay with my mobile phone and, for me, the current lack of merchants accepting it was its biggest downside. This category of technology is too young here in the U.S. to see what the real benefits — and drawbacks — will be, but consumers can likely expect to see more options to pay with their smartphones in the near future.


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