Introducing New Online Payment System: Square

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BY GARY COTTON
ANCHOR CHRISTINA HARTMAN

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Square co-founder and CEO Jack Dorsey recently announced a new version of his company's digital payment system.

Their latest smartphone app lets customers open tabs and pay for products in stores -- with their names.

Their new system called "Card Case" is an extension of their current digital payment system -- and saves payment information after a single swipe.

The New York Times' Bits blog explains...

"With two new apps, Card Case for consumers and Register for merchants, Square wants to be involved in every step of the transaction process by replacing cash registers, loyalty cards and paper receipts. ...Shoppers pay by simply giving their name to the merchant — as in, 'charge it to Jack.'"

Other digital wallet accounts exist, but Dorsey says the simplicity of Square's program stands out from the competition. The CEO tells Fortune -- he took tips from iTunes and Amazon to create a more more streamlined system.

DORSEY: "You download the application to your phone. It's a beautiful card case, you push one button that says 'start tab', once I hit that I can put my phone away, go to the counter, and say 'I'd like a cappuccino please, put it on Jack' you can just pay with your name."

And customers aren't the only ones who can benefit from this new system. The other half of app seeks to eliminate the use of traditional cash registers -- even making it widely available to small businesses. A writer for the Wall Street Journal says...

"The aim was to give local businesses the kind of 'analytics' software that bigger companies such as Wal-Mart already have" and that it "...will give businesses access to data about their credit card transactions so they know what's selling and when, as well as who's buying."

But not everyone has been sold on digital wallet technology. According to Dorsey - only six percent of business transactions happen online. He says his application could help change that -- and addressed questions about security to CNBC.

"Square is still a relatively unknown company, how are you going to convince consumers that it's safe and secure for them to pay with their phones?"
DORSEY: "Just the experience itself is enough to convince them because they can see it immediately. It has your picture on it and when you use it at a merchant, they have your picture, so it's even safer then anything that we've seen before."

Square is going to face competition from rivals such as Google, Apple, and PayPal who are all reportedly working on similar programs.

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