Last week I had the chance to try out Square myself and here's what I thought about it and to be entirely truthful me trying to make a case to Square to give me one to take donations for my climb. For now, you can donate here.
First off, what is Square?
Square is a mobile payment system aimed towards individuals and single employee businesses. The company was founded by Twitter co-founder and Chairman, Jack Dorsey. The two parts of the system are the credit card reader dongle and program. Together they give anyone the ability to take payments through a swipe of a credit card.
The device itself:
The device is actually very cool to use it is about the size of a quarter and in the shape of a smashed cube with a audio jack. It is powered through each swipe which is really neat. They are planning on giving it away to everyone and making money off the transaction cost. I have heard some complaints about the device not being durable and flimsy when swiping, but I have not experienced this firsthand.
Update (2/18/10 10:34pm): I just heard that 3.5% is only if you manually input the card info, if you swipe it, is 2.9% but that is hearsay until I see some proof.
Update (2/18/10 8:42pm): Square is charging 3.5% and no flat fee. Here's some proof.
Square is still in beta so they have not definitively decided on the transaction cost but this is what I've heard (take this with a grain of salt.) The transaction cost is 50 cents per transaction plus 3% of the total. I talked to a Square representative at Macworld and was told that they decided to drop the 50 cent transaction fee and now it's just 3%. It's still in beta so it's too early to say. But if there is a flat transaction fee of say 50 cents and a percentage fee I'd rather just pay with cash or Paypal. With just a 3% fee it would be a welcome alternative and is competitive with Paypal and Google Checkout. Also, they plan to donate one penny of each transaction to the charity of your choice.
Square is a paperless company so they give you the option of emailing or SMS-ing your receipt and also allow you to search for it on their site. Here's what it looks like.
So far I've had a really good experience with the device, but I have not gotten the chance to extensively test it. When using the system it reminds me of the iPod/iTunes system everything works together and it's all very intuitive. I can't wait to get my hands on the device for a real test taking donations and payments, so I'll reserve my full judgment till then, but it seems like a great system. The only thing I worry about is the 50 cent transaction fee. If that is what they decide to do it would really cut into the margin. Since a $3.50 cup of coffee minus transaction fees (0.50+3.50(0.03)=61.5 cents) is $2.88 (rounded down). That's 17.5%!! Not even taking into the account how much it costs to make that cup of joe.
Update (2/18/10 8:45pm) Heres a screen shot of the merchant online view. Courtesy of Spencer Schoeben