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Square. What once was a simple four-sided figure is now an innovative device sure to change the world – or at least the world of credit cards. With Square, merchants can turn their iPads and iPhones into credit card machines, swiping and charging wherever they go. This may not seem like that big of a deal, but it is liable to make a significant difference in your spending in the future. In this article, we'll take a look at some of the innovations coming from Square and what those mean for credit cards to come.
What is Square?
Square is a simple device that plugs into a jack on an iPad or iPhone. The iPad version has slightly more options than the iPhone version, but the overall features are the same. After installing an app on the phone or tablet, a merchant can use Square like a standard credit card reader. The merchant can charge as much as he or she needs to with Square, and then all of the information is sent to through credit card processing as normal. After the funds have been authorized, the merchant gets his money and goes back to business.
Using Square does not cost anything until a merchant swipes a card. Every credit card transaction comes with a flat fee of 2.75%, but merchants don't have to pay for the device itself or the app associated with it. The theory is that most people are going to love Square so much that they'll use it over and over. Recent growth in the use of this device has confirmed that.
What does this have to do with me, the cardholder?
While the development of mobile card processing mainly impacts the merchants, there are big changes on the user's side as well. Think about a scenario for a moment: Your car breaks down in the middle of the road and you have to call a cab to pick you up. You left all your cash at home, so all you have is your credit card. Many taxi drivers only accept cash payments, so you'll probably assume you're just out of luck. Not with Square though. The cab you call can simply keep an iPad in the card and use it to accept your credit card. You may have to pay a little more for that, but at least you're not sitting out in the cold.
In many cases, Square costs less to use than other credit card processors. Even brick and mortar stores are starting to employ it for their charges because they can save money doing so. When merchants save money, you save money. You won't see nearly as many price increases as you may have once seen, and you'll know that those that do come up won't be the result of your credit card. Sure, some places will up-charge you to use a card to cover their fee, but they would do that with any processor. Most businesses will absorb the costs.
In June 2012, Square hit the 2 million mark for their user count, after just three years in existence. This substantial growth shows that merchants are enjoying the benefits of this device and its versatility. Square responds to a need that the chaos of the modern world demands. There's nothing but room for expansion from there.
The disappearance of the physical credit card
One of the most recent innovations from the minds at Square is Square Wallet. This literally turns your phone into a wallet with a simple app download. With the Square Wallet app on your phone, you can store your credit card information and then use it at select retailers. Simply say your name, and the cashier will pull up an account with your name and photo. If you are who you say you are, you'll be able to pay for your items without ever bringing your card with you. That is a definite sign of progress.
In addition to this option, Square now allows users to buy gift cards for one another through their phones. They can send them like they would an "eCard" on the internet, and then the other person can redeem them at a store. In Christmases to come, you may find yourself sending out nothing more than mobile gift cards to your friends and family, saving you the hassle of wrapping all those presents. This is practical, simple, and revolutionary.
There is no charge associated with Square Wallet, and its network of stores is growing by the day. You may not have many options if you live in a small town, but you will if you have mostly modern businesses around you. All it takes is one use to see why there's such a fuss about this.
Changes still to come
Nothing is certain about the way Square will impact credit cards in the future, but you can bet that there will be big transitions to come. Eventually the people at Apple will probably buy this idea and find new ways to incorporate it in their devices. Maybe the touch screen on the iPhone 9 will have fingerprint recognition technology that turns your finger into a credit card. Perhaps the simple card reader will also act as a card issuer for applicable businesses. Who knows? For now, all we can do is watch in wonder as this device changes everything around us.
Note that the Square Wallet app is available for most new iPhones and Androids. If you are running iOS 5 and up or Android 2.2 and up, you can download this on your phone. Links: Apple Store, Google Play
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.
*The content in this article is accurate at the publishing date, and may be subject to changes per the card issuer.