The "Other" Guys

So Intuit recently announced their new "GoPayment" service at the Google I/O developer conference. Using this service, it seems like they're directly challenging the Square model of cell phone add-ons to process credit cards. The way GoPayment works is that, by using radio waves, to transfer credit stored credit card information between devices. The advantage that GoPayment has over Square-type devices is that, whereas Square needs a physical add on, GoPayment does not. Moreover, it seems (unverified- just my personal perspective) that Square requires a Square-specific profile, kind of like a PayPal account where you can upload payment/payment receiving information for fail safes in case your card/account is declined, whereas GoPayment seems to bypass that and use the card information itself.

I wonder how this new development will impact/ how this new development pressured Square to release their new "Card Case" app which allows users to search for merchants that would accept the Square method of user-based "Card Case" and merchant-based "Register" functionality to pay for purchases by using only a name. Apparently, this would allow a customer to go into a store, open an app (which conveniently looks like a brown leather wallet, clicks to open a tab at that store and then gives the merchant their name. Once the name is given, the merchant can see a photo of the Square user to verify and can confirm/initiate payment using the customer's information that is already stored in the Square database.Although there are already concerns about the security factor of this, Square is on a marketing blitz to convince people that this bypasses the whole "mobile" thing altogether.

[Tangent: It is important to note that in parallel with Square's continuing developments, they did just receive a substantial investment from Visa ("in the single millions of dollars"). Although it's still not completely clear as to Visa's reasons for investing in Square, there have been two perspectives that are floating around- 1.) access to Visa's network could help facilitate the number of enhancements that would make Square more robust or 2.) Visa is investing in Square because it provides a way for Visa to "buy its way" into hedging its bets in the NFC war. Although Visa already has a swipe and go payment (PayPass), it would open up a whole new environment for swipe and pay on a smaller scale for smaller businesses that would like to offer an acceptance solution]

[New Addition: on 7/1, Square COO Keith Rabois explained to Fast Company what he would do with all the cash he's getting- it seems that they're really targeting small, local businesses. He added that they would be adding new features in July and August, but declined to define what they would be, simply stating that they would "extend and improve" some elements of the Register and Card Case features.]

[Additional Tangent: There was also an interesting article published in Fast Company about the Square face-off that also recaps the recent happenings, but it concluded in a very interesting way. It reminded us all that Apple actually has the largest treasure trove of credit card information on the web right now, with over 200 million credit cards.]

I beg to differ though, in actuality, this method seems to make the customers more dependent on mobile devices. Although it does help potentially decrease the cost of investment in the POS terminal for merchants (especially small businesses), it requires that both the merchant and the customer have access to a mobile device and the Square database. Current NFC/Proposed NFC pilots leverage a technology that can be embedded into phones (near field communication) but are also already embedded into smart chips and key passes. In this face off I think I'm going to stay on the side of NFC because it seems to not only be more flexible, but also more open to different forms of use.