Feeds

Price war beckons for mobile payments

Twitter founder's Square goes cheaper

Secure remote control for conventional and virtual desktops

Square, the beloved mobile payment system set up by Twitter founder Jack Dorsey, has dropped its 15-cent transaction fee as it tries to compete in the real world.

Square was touted as revolutionary when launched in 2009, and had VCs falling over themselves to contribute the $37.5m needed to implement its smart-phone-attached mag-stripe reader and accompanying back-end designed to spread credit cards to small traders in the USA. But Square now cutting its prices as it discovers that in the real world price matters a lot more than iPhone bling.

The idea behind Square is to allow small companies to accept credit card payments, with the addition of a plastic box that balances on top of an iPhone to read the magnetic stripe. That plastic box is essential as it differentiates Square from the various iPhone applications that already facilitate credit card transactions; those require the merchant to type in the number, which isn't nearly as cool.

Unfortunately, the box differentiates Square from Intuit's GoPayment system which also offers an iPhone-attached reader, and one that appears rather better attached. So we're into a price war. GoPayment charges 2.7 per cent, plus 15 cents per transaction, while Square (now) just charges 2.75 per cent – some swift calculations show that for a transaction greater than $300, GoPayment is cheaper for the merchant, but for everything below that Square can undercut its competitor. There are other differences, Business Insider has a nice (if now slightly outdated) rundown, but for most merchants price is the most important factor.

According to Square, the removal of the 15-cent fee means that "you no longer have to wade through a complex maze of hidden costs and fees". We're not convinced that adding 15 cents to each transaction qualifies as a "complex maze", but we do know that Square prefers to be seen competing on features, not price.

Last November, Square told TechCrunch it was handling a million dollars a week, but at that rate it will take 30 years to pay off the investment – even if one ignores the running costs – so the company needs to sign up a lot more merchants while avoiding any more price cuts. ®

Security for virtualized datacentres

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
Google Glassholes are UNDATEABLE – HP exec
You need an emotional connection, says touchy-feely MD... We can do that
Lawyers mobilise angry mob against Apple over alleged 2011 Macbook Pro crapness
We suffered 'random bouts of graphical distortion' - fanbois
Just don't blame Bono! Apple iTunes music sales PLUMMET
Cupertino revenue hit by cheapo downloads, says report
US court SHUTS DOWN 'scammers posing as Microsoft, Facebook support staff'
Netizens allegedly duped into paying for bogus tech advice
Feds seek potential 'second Snowden' gov doc leaker – report
Hang on, Ed wasn't here when we compiled THIS document
Verizon bankrolls tech news site, bans tech's biggest stories
No agenda here. Just don't ever mention Net neutrality or spying, ok?
Inside the EYE of the TORnado: From Navy spooks to Silk Road
It's hard enough to peel the onion, are you hard enough to eat the core?
prev story

Whitepapers

Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
Simplify SSL certificate management across the enterprise
Simple steps to take control of SSL across the enterprise, and recommendations for a management platform for full visibility and single-point of control for these Certificates.