Today I talk about one of the latest technology trends, the Square reader and digital payments.
For my full thoughts, please listen to the podcast.
Summary of Topics covered:
My digital trend spidey senses are tingling.
People often ask, what’s the next big thing? Sometimes I don’t know.
– Something intrigues me
– I see it in Wired
– I’m curious about it
– It makes sense
– Big names around it
– Then I want one
The topic of the podcast is the rapidly evolving digital payments space, basically the ability to pay for things other than with cash.
— Note from Jim —
The interesting part is I recorded this on Tuesday 5/24, mostly based on articles I had seen on the Square. Then on May 26th, Google rolled out its highly anticipated mobile-payments system, there were tons of links around the story, including one I must have missed around Visa announcing their Digital Wallet.
By Friday May 27, “PayPal had sued Google, alleging that two of the search titan’s senior executives who had previously worked at PayPal violated their contracts, and in one case actually stole confidential PayPal information and shared it with Google and other companies.”
So on one hand, this stuff has been brewing for some time, and I know that.
On the other hand, I feel that it has risen to the point of public awareness (at least for those like me that are on tech sites like Wired every day), to the point where Wired offered up a Near Field Communications FAQ.
The Square reader
For me recently, it started with the Square reader. It’s a small device attaches to iPhone, and lets merchants accept credit cards.
It was founded by Jack Dorsey of Twitter, who took the simple idea of quick communication, and grew it to 200 million users. Right now as of May, they have shipped 500,000 Square readers and the company has hit the milestone of booking $3 million in a single day.
This is according to one of my favorite Wired writers, Jason Tanz, who interviewed Dorsey in the latest issue of Wired, Twitter Cofounder Takes On the Credit Card Biz.
Why is this a great business?
– Getting an account is hard to do (merchant account, red tape – 4 weeks)
– There are several high fees (4 different sources)
– It fills an untapped need
– It’s linked with a burgeoning technology — Global smartphone shipments increased 74% from 2009 to 2010.
What is Square’s next step?
– They recently announced Square Register
– Helps merchants, lower fees, track inventory
– It collects lots of data, and as geeks and techies and marketers, we know data is good
What’s the marketing angle?
While I’m all for business models and metrics, sometimes having something that is just darn cool can give you a lift. If you are one of 100 artists at a show, and you can accept credit cards with your smartphone on the fly with a device few people has seen, that has to count for a little something.
But mostly, there are many people that came to mind for me that could use it:
Friends at a dinner or away for the weekend or bachelor party
Every pretzel guy in New York
Selling your car
Mow the lawn
Sadly, when I looked for a demo of the Square, I found the video above by Kevin Rose (an investor). He basically steals my thunder by showing how it works — before it even came out — and listing many of the options I did. But you instantly get the idea of what Square does.
This is going to be the GREATEST THING EVER
Near Field Communication, or NFC, starts taking hold.
This goes Square one better by not even requiring the use of the small dongle that fits into the earphone jack.
Major players like Visa and Google and Samsung are already hard at work. And what about our friends at Apple? Will we see this in the iPhone 5?
Sarah Clark of SJB Research and Near Field Communications World, told Wired.com recently ‘Apple is undeniably working on this, and they have some very interesting patent applications that show that they are serious about it,’ Clark said. ‘If Apple puts NFC into the iPhone, that’s going to be Day One of the commercial marketplace for NFC technology.’
Finally, I sum up the podcast by giving users a business idea around this (you’ll have to listen to hear what it is).
And if you run with the idea and do well, slip me a little bonus — straight cash please.