Remember Square, the company that makes those little credit card readers for smartphones? Now they have an incredibly simple payment system that doesn't even require a credit card.
Square officially took the wraps off its planned peer-to-peer payments service Square Cash today, and the results are quite impressive — it isn’t just creating a PayPal clone. It’s streamlined the transaction to a bare minimum of two elements: both the payer and payee connect with an email address and a debit card.
Here’s how it works: A payer simply creates an email from any mobile, web or PC client with the email address of the payee in the “To” line, email@example.com in the “CC” field and the dollar amount in the subject. Then the payer hits send. That’s it.
If the payee is already a Square Cash customer then he or she will receive the email notification and find the money transferred from the payer’s bank account in one or two business days. If either the payee or the payer — or both — aren’t yet Square account holders, then they would receive registration prompts asking them to enter their bank debit card numbers. Once that number is entered, their debit accounts will become automatically linked to their email addresses through Square. All further transactions require nothing more than sending and receiving email.
When Square decided to create this service it wanted to replicate the same simplicity of design and ease of use of its other payment products, said Brian Grassadonia, head of Square’s Cash team. That meant it wanted to strip out all of the steps that complicate other peer-to-peer payments services: no multiple verification steps, no entering checking account and routing numbers, no passwords and — most significantly — no need for a separate financial account to act as repository for all transactions. With Square’s approach, the consumers use the basic financial and online tools they already have, Grassadonia said.
Of course, the simpler a payment’s design, the more prone it is to abuse — in this case getting access to a consumer’s checkbook would as easy as hacking an email account. Grassadonia said Square is putting the same fraud prevention tools in place it uses to secure its business mobile payments networks. The first line of protection is an SMS alert system that notifies an account holder any time a payment is received or sent, giving the user the opportunity to suspend transactions. Square is also imposing a $2,500 limit per week on transactions.
Any square users in the audience? I'm curious to learn if anyone has tried the new service, and what they think. Maybe I’ll set up an electronic E-Sylum tip jar.
To read the complete article, see:
Square launches Cash, a peer-to-peer payments service that’s incredibly simple to use
Wayne Homren, Editor
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