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Apple Square sallies forth from stores

iPhone banky box is go. Bothered?

Build a business case: developing custom apps

Square is now in the Apple stores, both physical and virtual, putting the banking revolution in a plastic cube in front of a lot more eyes than its competitors.

For only $10 anyone can drop into an Apple store, pick up a Square box to plug into an iPhone, download the free app and start taking credit card payments. As long as that person is in the USA, and the credit cards were issued in America, and everyone is happy to give 2.75 per cent to Square.

Square isn't really a banking revolution; it's a repacked version of an existing service with slightly worse security and lots of Web 2.0 support (the company was founded by Jack Dorsey, formerly of Twitter fame).

Square claims to be disruptive, but such services have been around for decades in various forms. The company works hard to create an impression that it is something new, and does provide a veneer of usability on what has historically been complicated; but various other companies provide the same functionality with comparable rates, not to mention better security and a better physical fit onto the iPhone.

Feefighters provides a sliding scale to help businesses decide which low-volume credit card transaction processor will be cheaper for them. But iPhone users are notoriously insensitive to price, which is good considering that Square will send you a box for free if you sign up on its website.

Still, being in the Apple store is significant as it puts the product in front of people who might never have considered accepting credit cards before. VeriFone might provide a comparable service, and Roam Data might make a better box, but lots of users won't bother searching for alternatives to what they find on the Apple shelves.

It's hardly surprising that Square wants to charge for the boxes, given that the company has reportedly handed out 300,000 of them for free so far. That means, taking the company's claimed business of $1m a week, that each Square customer is processing something like $3 in transactions each week, and thus paying Square around eight cents every seven days.

At that rate it will take two years for the customer to pay off the cost of the box alone - unless they paid $10 in the Apple store for it. ®

Build a business case: developing custom apps

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