I was at the Apple store to pick up a repaired iMac yesterday, and I asked a Genius what he could tell me about iPhone-based credit card services—systems that allow a vendor to scan a buyer’s card and take payments.
The service he suggested is Square Up, which uses a tiny card reader that attaches to the headphone jack of the iPhone or iPad. The buyer reviews an electronic invoice, runs her card (much like in the supermarket) and gets an email receipt. Cost to the vendor? From 2.75 – 3.5 percent of the transaction, plus $.15 per transaction.
Squared Up (also, confusingly called Square) involves no contracts and no monthly fees, so it’s appealing to people who don’t have a lot of transactions to deal with — an artist who sells at crafts fairs during the holidays, or a massage therapist who has one or two clients who prefer to pay by card. Since Square Up caps transactions at $1,ooo a week (that’s the maximum they will deposit into a vendor’s bank account), this isn’t a solution for busy stores or high-end merchants.
Square Up made a cute video with Adam Lisagor of LonelySandwich and put it on YouTube.