Square Launched Their iPhone Payment System, but Receive a lot of Bad Press Already

Within the first 24 hours after jack Dorsey (Twitter co-founder) launched his new product called Square, he is already getting a lot of mixed press.

What is Square?

Square is a magnetic card reader that plugins into the headphone jack of an iPhone. Gigaom explains it as:

A credit card (or a debit card) is swiped through the reader, it reads the data and converts it into an audio signal. The microphone picks up the audio, sends it through the processors and then is routed to Square’s software application on the iPhone. From there the encrypted data is transmitted using either Wi-Fi (for iPod touch) or a 3G Internet connection to back-end severs, which in turn communicate with the payment networks to complete the transactions.

No information is stores on the iPhone or ont he device, plus Square is able to work on any device: Android, Blackberry, Symbian and even computers. “As long as we have software on that device, our reader works,” said Dorsey. Square basically makes any iPhone the equivalent to a $900 wireless credit card terminal.

Our thoughts so far!

Other press sources are reporting that Square is already worth $40 million on the day of launch. However, I think this number is very low! I can see this product has a lot of potential and can be adopted very easily. However, it has a huge amount of limitations. If Square gets mass adoption then the card companies like Visa and Mastercard could easily just develop their own similar product, and maybe even work out a way to block Square from accepting their cards. Additionally, established customers will already be tied into long term contracts with other merchants

Whats your thoughts on Square?

Other reports

Gigaom – Jack Dorsey on Square, How It Works & Why It Disrupts

Switched – Twitter Co-Founder Launches Square, the iPod-Ready Payment System

The Inquistr – Am I The Only Person Not Excited About Square?

Techcrunch – Square Worth $40 Million Before Launch