Simply put, Square is revolutionizing the mobile payment industry. For those of you who (somehow) haven’t yet heard of Square, the service allows you to take credit card payments from virtually anywhere by using a free dongle that hooks into your smartphone’s headphone jack. Simply swipe a credit card through the dongle, follow some on-screen instructions, and you basically have a sale, complete with an e-receipt sent to your customer via text message or email. Where Square makes its money is fees; users are charged a simple 2.75% per-transaction fee.
Last year at this time, Square announced that it was hoping to process $1 billion in payments within the next year. Now, a year later, the company has announced that it has shattered its expectations, achieving 2 million users and processing a massive $6 billion in mobile payments. Square has been actively growing in numerous ways over that time; it has put its service in several New York City taxis, and created the Square Register app for iPads which allows small businesses to set up an iPad as a register for easy use.
Times are good for Square which, aside from completely revamping how we think about mobile payments, now has an estimated valuation in the $4 billion range. That said, Square may soon face competition from some relatively larger sources. PayPal is working on a similar service, and is expected to try to undercut square by shaving 0.05% of the transaction fee, coming in at 2.7% a piece. Groupon is also said to be testing out a Square-like service.
One thing is clear, the mobile payment revolution is on, and Square continues to lead the way with key partnerships and innovations in its service. With 2 million users and over $6 billion in payments processed, Square currently has more than a simple leg up on the competition.