tequila bomb

Square : A Startup praying to be acquired…

Square shipped its iPad app last month, today the company’s free iPhone app makes the App Store, and promises that “soon, Square will be on mobile devices everywhere”.

The service lets people take credit card payments using their mobile phone. It works through [the] use of a card reader that plugs into the iPhone’s headline port. We think this is only the beginning of the kind of authentication solutions we’ll see ship for the iPhone and other smartphones.

It is clear that Apple are already well advanced with their plans in this area. They might look at Square as a possible acquisition target. But then again, why bother? Apple already have a global payment network. Square is not even global yet.

Apple already purchased Siri, which is likely to become the backbone of small online transactions for concert tickets, cinema tickets and so on. The iPhone is also rumoured to be getting near field (RFID) technology in a future iteration which will allow purchase verification at venues and turnstiles. For this Apple already acquired VIVOtech.

Apple have credit card processing technology, and millions of credit cards on file from all over the globe. And they can do the whole process in software with credit cards held online in iTunes.

The Square kludge you attach to your device is fugly. It really needs to be incorporated into the mobile device it is used on. I don’t see Apple doing that. But if they did, they would own it first. Google and Android might be happy with a dongle stuck on their phones, but Apple will not.

This system overall reminds me a lot of the Rabbit mobile phone failure in the UK. Great idea. But no future in its launch form. In short : Too much junk to carry around on the off chance of being able to use it.

But I think Square already know all this. They are gambling on a long shot that they can get to some kind of critical mass with adoptions, and then Apple will snap them up. If not they hope that another suitor in the form of Google, or perhaps HP will happen along. Or perhaps they will morph, or merge with one of the other companies emerging in this field.

But as they are I don’t see a future other then acquisition, or perhaps Square being a niche system in and around trendy cafes in California, for a while, before it finally disappears.

The PayPal app has more chance of taking off by itself as a method for casual payments than Square does, in my opinion. I don’t need a dongle with PayPal, it will fund itself from my credit cards that it has on file, and stores can get a merchant account and a sticker in their window saying PayPal (or simply showing Credit Card logos) and more people will recognise what is going on.