MIAMI — Jack Dorsey wants to give the taco trucks of the world an easier way to serve card-carrying consumers. But the founder of the payments software provider Square Inc. has his sights set on big-box retailers as well.
He also envisions a payments system that can eliminate banks.
Dorsey, best known as a co-founder of the social media sensation Twitter Inc., revealed more details about plans for his latest endeavor last week at the Underbanked Financial Services Forum here.
One of his long-term goals for the company — which enables users to accept debit and credit card payments through a nickel-sized, square-shaped device that plugs into mobile phones — is to have his application adopted by merchants of all sizes, not just small start-ups.
How he plans to differentiate Square from other mobile payment providers is by offering vendors as well as consumers, detailed data derived from the transactions.
"The real thing behind Square is the receipt experience," Dorsey said. The receipt from every transaction can be instantly e-mailed to the payer. Included on the receipt is standard purchase details (item, price) and the merchant (address, phone number, website).
However, the receipt also includes details like a map of where the transaction took place and the number of visits the payer has made to that merchant.
The payer, for example, can see exactly where the transaction happened, which eliminates some of the confusion that can arise from vague descriptions on bank statements that can often cause a consumer to question the transaction.
At the same time, merchants can build loyalty programs by tracking how often customers make purchases, and how much they spend.
Ultimately, the data can help merchants better manage their businesses, Dorsey said.
"If you go to any small coffee store in the country and ask how many cappuccinos they sold in a day, they'd have no idea," he said.
For example, food trucks can use Square to determine where they sell the most tacos.
Some people noted that Square might have little value to the underbanked, who might not have a bank account or access to a mobile device, but he tried to address those issues.
"What we'd really like to move towards is a transaction without interacting with the bank," Dorsey explained.
Dorsey envisions Square offering prepaid cards that people could use to upload payments and other income and then turn around and make purchases with the card. "That is something we would love, love to move to," he said.
Some attendees became believers after seeing Dorsey demonstrate the product.
"The Square application and innovation can really open up additional economic opportunities for people," said Connie Evans, the president and chief executive of the Association for Enterprise Opportunity, a trade organization representing the microfinance industry.
Now, "anyone can be a vendor," she said. "It democratizes commerce and transactions."
The Square card reader is free, and there are no activation or monthly maintenance fees. For every swiped transaction, Square charges 2.75% plus 15 cents, and on keyed-in transactions where a card is not present, the charge is 3.75% and 15 cents.
Already, requests for the Square reader are backed up, according to the company's website, as it works to finish its beta testing and ramp up manufacturing.
"We think it's there," Dorsey said. "We just think it's a matter of time" before this catches on.
