Twitter's Jack Dorsey reinvents US card payments

Everyone's getting real excited about Jack Dorsey, the co-founder of Twitter, and his new payments application for the iPhone called Square.

If you haven't seen it, here it is:

In a lengthy interview with Pymnts.com, Dorsey says: 

"We can provide a lot of things that I think have been missing in payments – specifically like around the receipt, for instance. We all get these receipts, these paper receipts, that most of the time people are just annoyed to receive because they're not really useful. So what if we could really turn the receipt into more of a publishing medium, into something that lives on and something that is actually clickable and useable, and something that just exposes the various end points of the transaction. That's exciting."

I agree and the full interview is worth a read / listen.

The thing is that Square is good for the American markets, but it is very last century because it focuses upon a card's magnetic stripe and signature for authentication.  That's the way Americans pay for things but other markets have moved away from this as it is so insecure.

For example, watching the video of how you might pay using Square, the idea of fraud pops into my head with big alert signs, probably because it would make it easy to access a person's credit card using Square.  In particular, a signature based upon scratching away with my fingernail ...

This is why so many other markets, most recently Canada, has moved over to a Chip and PIN world, leaving America languishing in the past.

That is why Square has a limited market.

Now then, if Mr. Dorsey can take the Xiring terminal and build that into Square, he could be onto something.  For example, here's Barclays guidance video for online secure payments (2:50 is critical point here, the Xiring terminal):

Or maybe it's just something as simple as combining Square with text message alerts to the credit card holder every time a Square payment is made.

Nothing like simple solutions to complex problems, aren't there?

Comments

[Vit Kantor]

hello,
to be able to send text messages (or a "real-time" notification of any kind) to a payer, that payer info must be available either to the merchant or to the card's issuer bank. If devices like Square take off, the issuer banks would do well to require that card users provide phone number to send text/voice messages to. Then the issuer bank would be able to send notification to the payer (and many banks have that option available already, I believe)...
If Square becomes popular it would be great if the issuer banks provide one more convinience: allow card users to register their email address for receipts with the bank. Then Square service would send a receipt to the bank issuer (and banks' addresses could be easily enough provisioned into the system in advance), and the bank woudl forward the receipt to the payer (and also store it, maybe for additional small fee).

Best regards,
Vit Kantor

P.S. I read your posts at swiftcommunity site regularly and like them very much. Thanks!

[Chris Skinner]

Thanks Vit

And the text message service is a simple thing that banks can offer to clients. In the case of ABSA, South Africa, customers even pay for this alert service.

Chris