Monday, November 14, 2011

Twitter founder has smartphone ‘talk’ to cashier while in your pocket

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Smartphone payment tools are getting even smarter.
Square, the San Francisco mobile payment technology company started by Twitter co-founder Jack Dorsey, has launched an app that lets users buy things without even taking a wallet or phone out of their pocket.
The app, called Card Case, automatically opens a “tab” for a store when you approach. To buy something, just tell the cashier your name. The cashier confirms your identity with a photo of you that the store’s Card Case app displays on its smartphone or tablet, and away you go.
“I like the idea of Card Case, because we’ve been using Square, and because it lets you pay without taking anything out of your pocket,” said Patrick Lynch, an owner of Bon Me Truck, a food truck serving Vietnamese-inspired cuisine. “It gives you the customer’s name. It’s a little more personal. Mostly, it’s easier for them.”
Lynch signed up for Card Case last weekend after it launched on Nov. 4, but so far no one has used it to pay for food. He said Bon Me has been using Square — which requires a debit or credit card to be swiped through a small scanner attached to a smartphone — since about a week after the truck opened for business in April. He estimates the truck takes about 50 credit card orders through Square per day.
Lynch said Square was cheaper than traditional credit card scanners — he saw quotes for $75 per month to lease the scanner, and $15 per month for the data connection. For its part, Square takes 2.75 percent of every purchase, but its scanner and apps are free.
“Square has been very good, just for being able to take payments on the go,” Lynch said. “And as a new business — we just opened in April — there’s no startup fees, no equipment to buy, no monthly fee.”
The service also piques the interest of customers who find taking payments through a smartphone a novel idea, he said.
“If we get one credit card order, usually we get a bunch, because everyone’s like, ‘Ooh, what’s that?’ ” he said.
Last week, Square landed an undisclosed investment from British billionaire Richard Branson. Also, former Harvard University president and U.S. Treasury Secretary Larry Summers joined the company’s board of directors in June.
Nick Holland, a payment technology analyst at Yankee Group, said Square has been a boon to small businesses.
“It’s almost a no-brainer for small businesses,” he said. “It gets them the cash flow they need with very little risk. It solves a real problem.”
Still, Holland thinks smartphone tap-and-pay systems using near-field communication technology — such as Google Wallet, and a competing product by a collaboration between AT&T, T-Mobile and Verizon being tested next year in Austin, Texas, and Salt Lake City, Utah — will eventually prevail.
“Our most recent estimate is 40 million cell phones have that technology in it,” he said. “It’s going to be as commonplace as your phone’s camera after a few years.”
Online payment giant PayPal has also been rumored to be developing a new mobile product.
“They’re the 800-pound gorilla in the room,” Holland said. “They’re very keen to get into the physical world, since they’ve been all online all along.”
If you’re perfectly happy paying by plastic, you may not need to worry about it for a while. Holland expects physical credit and debit cards to stick around for another 10 to 20 years.
“Old technology works,” he said. “The biggest reason old technology doesn’t go away is because it works.”
And while Card Case’s trick of payment without taking anything out of your pocket sounds cool, Holland doesn’t see it as a killer feature.
“I’m not sure I consider (taking your phone out of your pocket) such a hardship,” he said. “I don’t see the problem that solves.”

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