I try to keep up with the latest development in the payment card industry because I think it is important. Last night, I found something call Square that looks pretty cool and worth checking out some more. Here is an excerpt from Wired Magazine “Twitter Cofounder Shakes Up the Credit Card Biz” (emphasis added),
His new company began with similarly modest aims: give anyone the ability to accept credit card payments through a tiny reader that plugs into their iPads and smartphones. Called Square, it has signed up hundreds of thousands of merchants and processed $66 million in transactions in the first quarter of 2011 alone. The startup is also building a vast database of financial information that its customers can tap into. [Kempton’s note: The transaction processed is one thing ($66 million for a new gadget). What is as interesting is the financial information Square tracks.] It tracks each sale conducted through its credit card readers, allowing the company to calculate everything from the busiest sales day of the week (Saturday) to the average price of a cappuccino ($3.09 as of April 18).
The power of that kind of data analysis helps explain why Square was able to close a second round of funding in January: $27.5 million fromSequoia Capital, Khosla Ventures, and others, which valued the young company at $240 million. Then Visa invested an undisclosed sum in April. [Kempton: I like the Visa investment. Interesting to know: “how much” & “under what terms”?] .Wired sat down with Dorsey at Square’s offices in downtown San Francisco.
Wired: You got the idea for Square after an artist friend lost a $2,000 sale because he couldn’t process credit cards.
Jack Dorsey: Right now there are about 8 million merchants in the US that accept credit cards. That doesn’t include people who do transactions over craigslist or dog walkers or people fund-raising for the PTA. There is such untapped demand. Like, we had a couch in the office that was really ugly, and we sold it for $5,000, and we accepted a credit card. There are moments in life when that’s necessary. And that’s what we’re focused on.