November 4th, 2011

Square updates iPhone app with automatic, location-based payment

Square Card Case iPhone appSquare, the mobile payments start-up, has updated its Card Case mobile app to make payments with smartphones even easier by allowing US users to pay without taking their phone or credit card out of their pocket.

Initially the updated app is available on iPhones running iOS5. Square plans to bring the same features to the Android app.

The updated version of Square’s Card Case includes “automatic tabs”, which uses the new “geofencing” technology in iPhone’s running iOS5, rather than a NFC (Near Field Communication) chip,  to detect when users have arrived at or near a retail venue, such as a coffee shop. Geofencing creates virtual boundaries around specific geographic points. An iPhone running Apple’s latest operating system, iOS5, can detect when one of theses “fences” is crossed and will then trigger some form of “event” or “notification”.

If the merchant is one of the 20,000 signed up so far to Card Case, the buyer can simply provide their name to pay for the coffee. The updated Card Case application also includes Twitter integration, through which business owners can see reviews and comments from customers.

The earlier version of Card Case required users to open the app and manually start a “tab” when visiting a merchant.

Square was co-founded by Jim McKelvey and Twitter founder Jack Dorsey. In June, the Wall Street Journal reported that the company had attracted $100 million in funding from a group led by Kleiner Perkins Caufield & Byers, valuing the company at $1 billion.

In May the company introduced Square Register, a software system through which merchants can receive and analyse payment transactions.

Currently, there are two ways that businesses can use Square:

1. by accepting a credit card payment through a free, square-shaped dongle that plugs into an iPhone or iPad.

2. by a customer using the Card Case app, which the merchant then tracks using Square Register.

Square says that it has shipped 800,000 Square readers. But competition in the mobile payments market has increased markedly.

Google introduced Google Wallet earlier this year, which can make use of NFC and allows consumers with some Android phones to pay for items by tapping the phone against a special terminal. EBay’s PayPal unit has predicted it will process $3 billion in mobile payments this year through PayPal Mobile. Intuit and VeriFone systems and financial services companies like Visa have also unveiled their own forms of mobile payments software.

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