By David Fish, Sr. Analyst, Mercator AdvisoryGroup’s Credit Advisory Service
Today’s American Banker had a news brief on everyone’smost anticipated (or dreaded) mobile card acceptance technology,Square.
Mercator is awaiting Square’s market entry as they launchinto what we’ve identified as a somewhat sizeable marketopportunity in the mobile merchant and person-to-person paymentsspace. They seem to have worked out the kinks in their supply chainand have similarly addressed the risk associated with acquiringpayments for micro merchants without an ostensible storefront orbusiness address. We imagine that one of those risk-related hurdleswas securing an ISO sponsorship, which Square appears to havecompleted sometime in the first three or four months of 2010.Square is undoubtedly an exciting business play in the stuffy oldmerchant services space, but the proof, as they say, is in thepudding. We will be watching Square closely in the weeks and monthsto come as they commence their rollout.
Square Inc. is shooting for a mass rollout of itsmuch-delayed mobile payment service by late summer.
The San Francisco company released a beta version of itsservice to a small number of merchants in December and originallyintended to roll out its product more broadly early this year. InJune, its chief executive and co-founder, Jack Dorsey, e-mailedcustomers to say the mass rollout was going to be delayedindefinitely, because of hardware shortages and the need tostrengthen fraud management capabilities.
Square lets people accept payment cards with mobiledevices.Dorsey said the company has learned a lot about fraudprevention. Square sponsors merchant users and fronts themmoney.
Over the past few months, Square has been building andtesting software that flags irregular transactions as well as othertools that authenticate the identity of a credit carduser.
Square said it solved its hardware issues after co-founderJim McKelvey was dispatched to China to deal with manufacturingbottlenecks. Dorsey said Square now has the ability to make 10,000daily of its namesake square card reader devices that plug intophones.