Thanks to the wonderful world of Twitter, a friend that always seems to have the very latest or very coolest news to share (@Jasonfas) inadvertently pointed me in the direction of this Youtube video by Kevin Rose, the founder of Digg.
The video is a run through of a beta/prototype app and plug-in accessory for the iPhone that allows the user to create their own credit card transactions wherever they might be in the world (with signal).
Whilst, from my own cashless point of view, this is an excellent concept and will certainly radicalise how vendors and consumers go about transactions – there are a couple of big concerns at the same time…
Firstly, it is based upon card swipings. Swiping a card, as far as I am concerned, is as archaic as paying in pennies. It is unsafe and usually means signing for authorisation rather than the far more trustworthy chip and pin. The action alone is bulky and unnecessary and, worse of all, it means that the card owner has to hand over their beloved card to the vendor, allbeit temporarily. The major card manufacturers and some serious 3rd party players are leaps and bounds ahead of swiping… even the highstreet-ready paywave contactless technology seems more fitting but that is just the beginning of what is (and could be) out there.
Secondly, who is going to allow a complete stranger running a cheese stall in a marketplace to take your hard-earned money through all you know is their own personal phone? There is going to have to be an incredibly heavy brand-trust building exercise that needs to take place before these things can hit the shelves in a sustainable way. VISA, Ammex, Mastercard etc are all household names with huge swathes of brand history and huge consumer/celebrity and corporate endorsement and they are all still struggling with the public’s relentless grasp on cash. If Square think they will be able to waltz in to a market as polluted as transactions is already without a steep learning curve… well… I guess they’ll have an even steeper learning curve to battle!
So what could Square do to make their lives that little bit easier?
Work faster. The market place is already beginning to emerge with similar propositions, like Mophie for example. Even in England alone it is clear to see that battles like this rely on brand preference, MasterCard vs. VISA will continue their epic marketing and PR battle for eternity; constantly pitching themselves as the consumer’s choice. If more than one Square comes to market in a short period of time, how will they place themselves in people’s minds.
Team work. From what I have read so far, there doesn’t seem to be a corporate partner involved which is certainly heroic and, hoping it takes off, such an absence will lead to an exceptionally profitable venture for Square. But teaming up with the guys at Visa or suchlike might actually yield more in the long run that initially thought. VISA invariably has a huge resource of consumer feedback, trials, psychology and advance technologies that they are just itching to get out of the lab and onto the high street. If the minds of Kevin Rose and Jack Dorsey (another investor and coFounder of Twitter) who’s’ entire success has been built on implementing the worlds most simple user interfaces to something we all do every day anyway teamed up with the techs at VISA and brought to market a joint concept – consumer friendly and accessible and still safe, secure and cutting edge.
I’m still really interested in how this will work in the future… I don’t want to poo-poo the concept at all but right now I don’t believe Square is going to pave a way to a cashless society with this incarnation but I believe they will eventually as long as they listen to the old boys in the game and build on their learnings from over the years.
If anyone at Square ever reads this, I’d love to know the answer to a few questions – namely, micro-payments (which this is all it will be used for initially): who picks up the transaction fee? Especially in light of Ammex’s incredible fee for vendors? And, please tell me you’re using the technology behind the app, Bump for secure iPhone to iPhone transactions? That’d be mega.