SitDown. StartUp.

My square finally arrived in the mail today. Awesome device with a seamless integration on the itouch. I linked my checking account in a few seconds and can start receiving payments. The process is smooth and the dongle is pretty stable when plugged in.

The downside is that Square charges 3.5% on each transaction. This is pretty high, especially for a card-present transaction. Most merchants charge around 1.6%-1.8% on card-present transactions. I believe the reason Square would charge a much higher percentage is due to the potential for chargebacks and fraud. I’ve worked extensively in mobile and e-commerce payments for the past 4 years and chargebacks are mission critical. Paypal dealt with it. Merchant processors deal with. Banks deal with it. The problem is that processors require an extensive application process to mitigate the chargeback risk of a merchant. Square on the other hand is making it incredibly easy for anyone to start swiping away. This increases the chances of chargeback risk/fraud for Square. Needless to say, they probably took all that angel funding and put it in an escrow account to cushion for potential chargebacks.

On the bright side, its fun and is as simple as that hipster demonstrates in the square demo. They even send you a receipt after purchase (see above). Thanks Square. Now I just need to start my taco stand on west broadway.