Square is a service I had been waiting anxiously to come out of vaporware-land and into reality since I found out about it in late 2009. Square allows you to take credit card payments from your iPhone, iPod touch, iPad, or Android 2.1 device — as long as you have a WiFi or 3G connection.

I did a first look a while back and I have since received my Square Reader. It definitely works as advertised. Once you activate your reader with your account you can instantly take a payment. It is super easy. Launch the app, plug in your reader, enter your items, the price, and hit Payment, select Credit Card, and swipe the card.

Then you’ll hand your device over to the payer for them to sign and enter their email address for their receipt to be sent to them.

It is truly a simple system, and doesn’t require a merchant account, no monthly fees, and they even send you the reader for free. They do, however, take 15 cents off every credit card transaction, and additionally 2.75% for swiped card or 3.5% for keyed in card numbers. All in all, it’s a tiny fee considering the other savings from monthly fees. Also, 1 penny from every transaction fee goes to charity:water, which is completely awesome.

Now, there are some limitations that weren’t revealed until I was able to activate my reader. I’ll just go ahead and make a list:

Card payments have hindering caps. As of this publication, card payments are limited to $100 per transaction, and $700 per week. This is lame. I shared some correspondence with Square’s friendly support team about this, and they initially said the first rollout of Square is purely intended for personal use. I told them that is how I intend to use it, and $100 per transaction is too low for even that. Heck, their first video shows a guy selling a couch for $300. Anyway, after pointing that out, Square agreed with me that the limit is too low, and they are planning to raise it after building out their underwriting infrastructure.
If you are intending to use it for business right off the bat, Square is not currently supporting EINs. Also, that aforementioned limit may be a hindrance. Square assured me EIN support is coming soon.
They are disparities across the apps. Here I am talking about the iPhone (count iPod touch in there when I say iPhone) and iPad apps, as I haven’t played with the Android app. Mainly, the iPad supports sales tax and inventory, and the iPhone doesn’t. Here’s why these disparities are odd to me: they’re the exact same app, with different user interfaces. The Square app for Apple devices is universal, meaning it is one codebase that displays a different interface depending on which device it is on. So the code is there, but Square didn’t design a user interface element for something like sales tax on the iPhone. I also raised this question with Square, and they said these features are on the list.
Payer signing is a one shot pony. If your payer screws up their signature, there isn’t a clear button to try again. This is a problem, since payers sign using their finger. It is unfamiliar, and it should stand to reason that it might take a couple tries. The only recourse is to take a “signature” that looks nothing like the payers real signature, or to clear out the entire transaction and start from scratch. Unacceptable, and Square offered no comment on this.

I honestly chalk up all of these to start-up jitters. Square is an infant company trying to revolutionize the credit card payment industry. I have no doubt that the issues will be addressed in time. The question is will they be addressed sooner or later?

Overall, Square does allow for drop dead easy payments, and I’ll probably get a ton of use out of it once the limit is raised somewhere in the ballpark of $300 or $400. Let’s face it, I have some previously loved electronics to sell, like, an iPhone 3G on June 24th, when I get my iPhone 4.

If you have any other questions for me, sound off in the comments.

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Square - Making Payments Mobile