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Category: Square

Jack Dorsey's mobile payments company Square unveils new checkout features

Square CEO Jack Dorsey on Saturday cryptically posted a photo on Twitter of a square plate with apples on it.

He was not referring to Apple retail stores selling Square's mobile payments readers.

SquareDorsey on Monday unveiled a new checkout feature for the iPad that helps merchants stay in touch with customers, broadcast deals and track sales and the buying patterns of their customers (something that only big retailers used to be able to do).

Dorsey also showed off the Card Case, shoppers' equivalent of a mobile wallet.

Rather than having to whip out a credit card for every purchase at their favorite haunts, shoppers can buy a cappuccino as easily as they would a song on iTunes by opening a digital tab and paying with just their names. Shoppers can also view menus and track and store digital receipts.

The new app is now available from 50 merchants including flower shops and bakeries in Los Angeles, San Francisco, New York, Washington and Dorsey's hometown of St. Louis.

Square is one of a growing number of companies looking to turn smart phones into digital wallets. It aims to turn cash registers and credit card terminals into "relics of an expensive, complicated and impersonal commercial transaction system," Dorsey said.

Dorsey showed off the new features by beaming a live stream of a news conference at his company's San Francisco headquarters to TechCrunch Disrupt in New York. And disrupt is what he is trying to do.

He's taking on mobile payment systems from Apple, Google, PayPal and others, and at companies such as Foursquare, that help merchants track who their customers are and reward them for their loyalty. And Square is getting noticed: Visa invested an undisclosed amount in the company last month.

Even though Square boasted some big numbers (it has shipped 500,000 Square card readers, tallied 1 million transactions in May and is now ringing up $3 million in mobile payments a day), it is by no means a household name. Few shoppers have even heard of the service.


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-- Jessica Guynn

Photo credit: Jack Dorsey

Jack Dorsey's Square lands strategic investment from credit card giant Visa


Square, the hot young start-up that is trying to allow any business anywhere to accept credit cards, just landed a marquee investor and a new infusion of cash.

Square said Wednesday that it has taken a strategic investment from Visa Inc. The company declined to comment on the terms. A person familiar with the deal said it was in the "single-digit millions."

The partnership is an important milestone for Square, which said it would help put credit cards in the hands of more individuals and businesses that only take cash or checks. Under the deal, a Visa executive will join Square's advisory board.

In a written statement, John Partridge, Visa's president, said his company "continuously evaluates new technologies and invests in payment innovations that can enable more businesses to accept Visa."

"Square's early success suggests that using Square and a mobile device, new types of merchants will now be able to accept payment and help grow their business via Visa's global network with the security, speed and reliability we provide," he said.

Kutgb6nc Square closed a $27.5-million round of funding led by Sequoia Capital in January, giving the company a valuation of $240 million, up from $45 million in the previous round of funding.

It's a significant vote of confidence in the company founded by Twitter's Jack Dorsey. Square, launched two years ago, is tackling a fundamental challenge in the world of plastic: About 90% of Americans carry credit cards, yet 27 million businesses in the United States don't accept them.

Dorsey wanted to bring the simplicity of Twitter to the world of mobile payments. So Square built a business around a free tiny, square-shaped credit card reader that plugs into the headphone jack of an iPhone, Android phone or electronic tablet. Basically Square turns cellphones into credit card readers.

Unlike many plans set up between small businesses and credit card companies, Square charges the same fee to everyone. And Square doesn't rely on typical means of evaluating credit worthiness, making the service available to more merchants.

Square is playing in one of the hottest markets to emerge from this Internet boom. It has a host of smart, deep-pocketed competitors, including Intuit with its GoPayment service.

It also has run into some challenges. There's heated litigation as well as competitors pushing their own version of credit card readers that attach to phones and questioning the security of Square's service. Also, as Square grows, it may have more exposure to risk and fraud.

But none of that seems to be slowing its growth. Square opened up its service in October. It's now signing up nearly 100,000 businesses a month, according to Chief Operating Officer Keith Rabois, an early PayPal employee and former vice president of business development at Slide who came on board last summer to help Dorsey run the company. He declined to say specifically how many customers Square has, but noted that several hundred-thousand merchants are now using Square.

Square last week also landed a deal to put its credit card reader in Apple's 235 U.S. stores.

Now it's getting Visa's seal of approval. The credit card company had signaled its interest in Square in a blog post about mobile payment services on Valentine's Day.

"We couldn't think of a better partner," Rabois said.

Visa could also help Square with its ambitions to expand internationally, he added. Square already has 85 staffers and is on track to more than double that by year's end.

Dorsey, in the meantime, is pulling double duty. He's back at Twitter as the company's executive chairman at a crucial juncture for the popular Internet service. Dorsey was ousted as Twitter’s chief executive in 2008,but he remained on the board. He's considered by many to be one of the top product innovators in Silicon Valley.


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Square answers VeriFone's accusations on security of mobile credit card reader

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-- Jessica Guynn

Top photo: Jack Dorsey, co-founder of Twitter and Square, speaks at the Columbia University School of Journalism in New York on March 29, 2011. Credit: Jin Lee/Bloomberg

Bottom photo: The plastic card reader from Square plugs into a headphone jack. Buyers swipe credit cards through it to send payment data to an application on an iPhone or iPod Touch. Credit: Robert Andersen/Square

Jack Dorsey wants to take Twitter mainstream

Jack Dorsey

Jack Dorsey is looking to take Twitter to the mainstream.

The co-founder is stepping into a new full-time job as executive chairman to lead product development, all while maintaining his CEO position at his mobile payments start-up, Square.

Dorsey is also looking to bite into Facebook's dominance in advertising among social media companies, he told students in a lecture at Columbia University's Graduate School of Journalism on Tuesday.

"We have a lot of mainstream awareness, but mainstream relevancy is still a challenge," Dorsey said, according to a report on the lecture from the Wall Street Journal.

To that end, Twitter will have to become "more approachable so that people can get into it immediately and it's extremely relevant right away," he said at Columbia, according to Bloomberg.

Particularly, Twitter needs to become easier to use and navigate for those using the micro-blogging site to get information and simply tweet about what they're doing or what they're thinking, the Journal report said.

A strength of Twitter, Dorsey said, is the ability for users to follow what they're interested in, according to the Journal.

"What's happening in Egypt right now. That's the value, not the brand 'Twitter.' So we need to refocus on that value," Dorsey said. "That's my goal in the next few months."

Dorsey's return to a full-time job at Twitter follows the move of Dick Costolo to the CEO spot in October after previous chief executive Evan Williams, also a company co-founder, stepped down.

Williams had been CEO at Twitter since 2008, and before him, Dorsey was chief executive going back to the San Francisco company's founding in 2007.

Dorsey assured those in attendance at Columbia that his new full-time role at Twitter won't impede his leadership at Square, which he started in 2009.

"I live across street from Square, and Square is two blocks from Twitter," he said, according to the Journal. "I live and breathe these companies."


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Photo: Jack Dorsey, co-founder of Twitter, listens to a question at the Columbia University School of Journalism in New York on Tuesday. Credit: Jin Lee / Bloomberg

Jack Dorsey, Twitter chairman, could take over product development, report says


Jack Dorsey, Twitter's chairman, might be taking on a larger role at Twitter, a report said.

 The co-founder of Twitter, and current CEO of mobile-payment firm Square, is in talks with Twitter's board of directors to "become something like a chief product officer," according to a report from Business Insider.

Jack DorseyA Twitter spokeswoman would neither confirm nor deny the report, telling the Technology blog, "Twitter is lucky to have the involvement of its founders. As we said last fall, we're fortunate that Jack (our chairman) is able to get even more engaged in the company. His assistance has been and will continue to be invaluable."

If Dorsey returns to the Twitter flock in a new roll, it may be a full-time gig, Business Insider said, citing unnamed sources for its report.

Dick Costolo, Twitter's current CEO, would not be moved out in whatever new roll Dorsey may take on, the report said.

Dorsey is said to be eyeing a more "day-to-day job supervising product development" while Costolo is focused on monetization efforts, Business Insider said.

"It's possible, however, that Dorsey will end up merely expanding his current consulting role," the report said.

As for Square, Dorsey possibly would step aside as CEO to move into a new, more demanding role at Twitter, Business Insider said, noting that COO and PayPal alum Keith Rabois may be an option.

Officials at Square were unavailable for comment on the report on Wednesday night.


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Top photo: The Twitter logo is displayed at the entrance of Twitter's headquarters in San Francisco on March 11, 2011. Credit: Kimihiro Hoshino/AFP/Getty Images

Bottom photo: Jack Dorsey's Twitter profile picture. Credit: Jack Dorsey/Twitter

Square answers VeriFone's accusations on security of mobile credit card reader


Square, a mobile payment start-up, has responded to allegations from a competitor, VeriFone, that it's products aren't secure.

On Wednesday, VeriFone posted an open letter stating that Square's mobile credit card reader -- which pairs a mobile app with a small square-plastic card reader that plugs into the headphone jack of smart phones or Apple's iPad and iPod Touch -- was easily exploitable.

"In less than an hour, any reasonably skilled programmer can write an application that will 'skim' –- or steal –- a consumer's financial and personal information right off the card utilizing an easily obtained Square card reader," VeriFone's Chief Executive Douglas G. Bergeron wrote in the letter. "How do we know? We did it. Tested on sample Square card readers with our own personal credit cards, we wrote an application in less than an hour that did exactly this."

Jack Dorsey, Square's CEO, responded with a letter of his own stating that VeriFone's claims were off base.

"One of our competitors alleged that the Square card reader is insecure," wrote Dorsey, who is co-founder and chairman of Twitter. "This is not a fair or accurate claim, and it overlooks all of the protections already built into your credit card.

"Any technology — an encrypted card reader, phone camera, or plain old pen and paper — can be used to 'skim' or copy numbers from a credit card. The waiter you hand your credit card to at a restaurant, for example, could easily steal your card details if he wanted to — no technology required. If you provide your credit card to someone who intends to steal from you, they already have everything they need: the information on the front of your card."

SquareUp Dorsey pointed out that the banks that issue credit cards acknowledge how easy it is to acquire and misuse such information and, for that reason, don't hold consumers responsible for fraudulent charges.

"When they are alerted to odd activity, they simply give you a call and will reverse the transaction," he wrote.

"With Square, your credit card is designed to be used without worry, in more places than ever before."

Square is also "constantly improving the payment experience to enhance security," Dorsey said.

"For instance, you can request an instant text message or e-mail receipt delivered from our secure server after every transaction."

JPMorgan Chase & Co., one of the banks VeriFone mentioned in its letter, processes payments made using Square's products. Dorsey said JPMorgan Chase backs up the company's technology and "continually reviews, verifies and stands behind every aspect of our service, including our Square card reader."


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Photo: A consumer uses a Square mobile card reader, plugged into an iPod Touch, to pay for an item in December 2009. Credit: Robert Andersen / Square Inc.

Square's mobile credit card reader easily hacked, says VeriFone

IPhoneSwiping.jpeg Using a smartphone to process a credit card payment, especially Square’s card reader, may not be safe for consumers, according to an open letter posted Wednesday by VeriFone.

The letter alleges that the Square setup is easily hacked and calls on the San Francisco company to recall the small phone attachment that can read card data. Perhaps unsurprisingly, VeriFone’s line of work is secure payment systems.

VeriFone’s Chief Executive Doug Bergeron wrote that the note was a “wake-up call to consumers and the payments industry.” He said criminals could easily create an application to steal financial and personal information from credit cards run through the Square device — known as a "dongle."

“The issue is that Square’s hardware is poorly constructed and lacks all ability to encrypt consumers’ data, creating a window for criminals to turn the device into a skimming machine in a matter of minutes,” Bergeron wrote.

VeriFone posted a sample skimming application and a demonstration video online and also notified Visa, MasterCard, Discover, American Express and JP Morgan Chase.


Square, Twitter founder Jack Dorsey's mobile payments start-up, may be worth $200 million in new funding round

AT&T, T-Mobile and Verizon partner on Isis mobile payment project

— Tiffany Hsu [follow]

Photo: Square's card reader "dongle". Credit: Square

Square's Keith Rabois talks about the mobile payments start-up's new funding

Square, the mobile payment start-up from Twitter co-founder Jack Dorsey, announced today that it has raised a new round of funding that values the company at about $240 million. I spoke with Square’s chief operating officer, Keith Rabois, about it.

Interesting side note: Sequoia Capital's Roelof Botha is joining Square's board. Rabois and Botha worked together at PayPal. Botha, who as the former chief financial officer at PayPal has some serious cred in payment systems, also got Sequoia to invest in "a little company called YouTube" -- at Rabois' suggestion.

How did the round of funding come about?

We took a very streamlined approach, no formal presentations. We didn't pitch anybody. In December, we basically only spoke with a limited set of people with whom we had longstanding ties. We said, "We'll sit down and talk to you about our business and how well it is doing and how we think about the world." It was just a conversation about Jack's vision for the company and Square and how well we are executing on that.

Why raise money now, and what will you use the money for?

No. 1, for recruiting. We currently have 52 full-time employees. We are targeting doubling or tripling that number in 2011. No. 2 is awareness. Not everyone is aware of Square yet. We are trying to change that.

How do you increase awareness of Square?

Historically the way people have found out about Square is that they pay a merchant at the farmers market with it and decide they want to get it themselves or they read about it on Twitter or in media coverage. But we have not engaged in traditional marketing campaigns. We are going to invest in marketing. You will see that go live in January. It's a big task to ensure that the 180 million people who carry plastic in their wallets know about Square.

How has adoption of Square grown since October, when you launched to the public?

We have been signing up 30,000 to 50,000 new accounts per month and the pace is accelerating.

Square has quite a number of competitors, and more emerging all the time. How do you handle that competition?

The good news is that Square is in a space that everyone thinks is interesting right now. There are a lot of things we do uniquely, like the quality of our design. We think about melding hardware and software in a beautiful experience for the payer and the business. We also are allowing people to accept credit cards for the first time without requiring a credit check. We use social data and other things to gauge applicants, and we approve 95% in less than a minute.

Will the management team expand?

We are looking ultimately for a director of engineering, but we are fundamentally very comfortable with how the business is operating right now.

Will Jack Dorsey remain CEO?

Absolutely, no doubt about that.

Why is he the right leader for Square?

He has two key ingredients: He has the macro vision and the pixel-perfect product vision. Almost nobody can do both.


Square raises $27.5 million that values it at $240 million

Square hires Keith Rabois, Silicon Valley veteran and investor

Schooling start-ups at Stanford

-- Jessica Guynn

Square raises $27.5 million in round that values it at $240 million

Not sure you can ring this transaction up on Square's mobile payment service. All those zeroes might fry the circuitry.

The company led by Twitter co-founder Jack Dorsey closed a $27.5 million round of funding that gives the San Francisco company an eye-popping valuation of about $240 million.

The funding round was led by Sequoia Capital, and also includes strategic and individual investors.

Square was valued at about $45 million in a prior round of funding. Previous investors include Khosla Ventures which also participated in this round.

Sequoia Capital venture capitalist Roelof Botha, a former PayPal chief financial officer and one of the investors in YouTube, will join Square's board.

This is a major statement for Square which only opened to the public three months ago. The company says its software which allows businesses and individuals to turn their smart phones into credit card payment systems is catching on.

The high valuation is the latest given to a Silicon Valley start-up, raising concerns about a potential funding bubble.

Palo Alto social networking phenom Facebook grabbed the highest valuation of all recently. In an investment round led by Goldman Sachs, it is said to be worth $50 billion. Last month Twitter raised $200 million in a deal that valued the San Francisco company at $3.7 billion.


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AT&T, T-Mobile and Verizon partner on Isis mobile payment project

AT&T, T-Mobile and Verizon Wireless want to replace your wallet with a smartphone. 

The companies, three of the country’s largest mobile carriers, are partnering to create a national “mobile commerce network” to allow customers across the country to make purchases with just a wave of an iPhone or Android.

The Isis project, announced Tuesday, will be headed up by Michael Abbot, a former financial executive with GE Capital.

The Isis setup would tap smartphone and near-field communication technology, which passes encrypted information between devices at close range but doesn't require contact.

That differs from technology from VeriFone or Square, which use accessories that can read a physical credit card. The companies behind Isis said they are developing security and privacy safeguards.

“While mobile payments will be at the core of our offering, it is only the start,” Abbot said in a statement. “We plan to create a mobile wallet that ultimately eliminates the need for consumers to carry cash, credit and debit cards, reward cards, coupons, tickets and transit passes.”Credit card

Over the next year and half, the venture will be rolled out in “key geographic markets,” the companies said, eventually becoming available to all merchants, banks and wireless service providers.

Isis will be hooked up with Discover Financial Services’ payment network -- currently offered by more than 7 million U.S. merchants. Barclaycard US is expected to be the first issuer.

The mobile payment system is already popular in countries such as Japan. Card issuers such as Visa and Mastercard have also been testing options that would likely compete with Isis.


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Photo: Square, a credit-card reader made for smartphones, is plugged into an Apple iPhone. Credit: Jin Lee/Bloomberg

Google's Eric Schmidt shows off mystery Android phone, talks mobile payments

Google envisions that Android phones will one day replace credit cards, its chief executive said Monday as he showed off a prototype of a mobile phone running a new version of Android.

This new version of Google's mobile operating system, which has the code name "gingerbread," will be out in a few weeks, CEO Eric Schmidt said at the Web 2.0 Summit in San Francisco. It will include near-field communication technology that could one day turn your smart phone into a digital payment system, he said: Basically, the phone contains a chip that lets you tap it to prompt real-world interactions, which in the future could include paying for something.

"People don't understand how much more powerful these devices are going to be," Schmidt said. But he cautioned not to expect that particular technology to roll out quickly.

"I expect to be carrying my credit cards around for quite some time," he said.

Schmidt demonstrated the technology while on stage. He bumped the phone to wake it up so it could pinpoint his location and provide information about the hotel where he was speaking. The camouflaged phone was "an unannounced device that I carry around with me," he said.

Tech observers are speculating that the mystery phone is the next Nexus -- the successor to the Nexus One, Google's Android phone -- called the Nexus S by Samsung. Schmidt would not give any details about the phone, but hinted that a Nexus One successor could be in the works. When asked about previous comments downplaying the possibility of a second Nexus, Schmidt said: "I said there would never be a Nexus Two."

The near-field communication chips transmit signals over short distances. That gives smart phones the ability to be used in place of credit cards, for example, by broadcasting data to devices that speak the same language. For example, in a store, you could "bump" your phone on an NFC sensor and pay for your purchase without having to open up your wallet.

A number of companies, including EBay's PayPal and Jack Dorsey's Square, are developing technologies that let people tap or swipe their phones to make purchases. Google has been hinting at its growing interest in commerce. The Internet search giant is said to be about to roll out online women’s fashion boutiques.

Schmidt said that mobile payments are promising because the technology reduces the risk of fraud. "The credit card industry thinks the loss rate is going to be much better," he said.

-- Jessica Guynn


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