In strongly stated letter, Square has asked British mobile payment company mPowa to stop using an image that's similar to a photo Square runs on its website.

The two images in question show a hand swiping a card against a square-shaped reader plugged into a mobile phone. Popular tech blog TechCrunch posted the letter.

This "is silly and childish," says mPowa chief executive Dan Wagner. "We'll probably take this image off, if it's offending them."

mPowa recently began soliciting U.S. partners for its dongle.

The unit of Powa, which operates an ecommerce platform, is looking to work with banks and others to white-label its product, as well as work directly with mid-size and larger merchants. mPowa has already signed up several thousand merchants, including an events company and a taxi cab company.

But unlike Square, mPowa has a reader that can process chip and PIN cards that employ the EMV security standard.

The incident could speak to a growing competition between outfits that offer such dongles.

"Expect a lot more where this came from," says Jim Van Dyke, the president and founder of Javelin Strategy & Research. "When PayPal started out they spent nearly as much time playing defense on patent as well as regulatory issues as they did offensively working to open up a new market. It's a plight of all successful payments innovators."