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Comment by BigZaphod | Hacker News Reader

Square is pretty cool. I dislike the SSN requirement, though, and haven't yet setup my account because of it. I know some of the actual people involved with Square, and I trust they did a good job protecting this stuff, but it still seems wrong that I need to register an SSN to accept payments from a card but not if the person happens to be using, say, cash or a check. Why is accepting a card so different?

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Square is assuming all of the chargeback risk. They mitigate that by verifying your credit history.

You have to do the same thing when signing up for a regular credit card gateway too.

The difference is credit. When processing a credit card, because fraud is so rampant, Square needs to at least somewhat vet the merchant.

In fact, the defining characteristic of Square seems to be how LITTLE you need to do to get a merchant account. You have almost certainly never tried with conventional systems if you think this is bad.

Exactly. Setting up a conventional gateway and merchant account takes weeks at best, complete with several contracts, credit check, authorization forms, and several rounds of changes to your website if you're taking payments online.

Yeah, but not with PayPal's "Website Payments Pro". It does usually take 2-3 days, but it's really quite painless. It certainly doesn't require a credit check.

PayPal probably already has an App too, so all they need is to give you is a reader.

Paypal was also revolutionary. Square is doing in the physical world what Paypal did online.

In both cases, fighting fraud makes or breaks the service.

Square is operating online too. That's what the mobile internet-connected computer is, that their reader is attached to. PayPal App + iPhone + reader = Square except cheaper, more reliable, and probably accessible to more people.

PayPal was revolutionary. The only thing I see here from Square that's even kind of new is the reader component, and that is hardly novel.

If I remember correctly, PayPal Website Payments Pro does require your SSN. There may be a credit check somewhere in the fine print.

You're right that they do take an SSN. I always assumed that was for tax or risk purposes. They don't say they do a credit check, but you're right, it is possible they do.

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