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Comment by thinkcomp | Hacker News Reader

Nothing. Square further propagates the status quo (plastic cards). There's no disruption involved. That's why Visa is an investor.

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It looks more like a trojan horse to me.

If they become the new merchant-interface, there's nothing stopping them from offering an alternate payment mechanism that doesn't rely on credit or debit cards.

Nothing stopping them- until Visa buys them.

Building the technology that could support Visa/MC/Amex alternatives and the userbase that gives it critical mass is probably the best way to get bought out by Visa/MC/Amex at an inflated price. No one says they actually have to ship their alternative payment system.

I'm an engineer at Square, so I can neither confirm or deny such speculation ... but in an interview with Wired, CEO Jack said "People understand credit cards. They know exactly what to expect from them. They’re used everywhere. But Square is payment-device agnostic. It doesn’t matter how you pay. Some of our users accept only cash." http://www.wired.com/magazine/2011/05/mf_qadorsey/all/1

Why not accept FaceCash then? The rate is 1.5%, much lower than what you charge now.

Well, whatever they offer it won't be NFC.

It can't. They still have to deal with acquirers, credit card issuers, and banks. No escaping that.

Besides their existing partners and infrastructure.

That's one way to look at it.

Another is that Visa believes that Square is a threat, thinks they may be successful and has invested to mitigate that threat, get visibility into their activities, and so on.

They're disrupting cash register manufacturers, not card issuers.

They are still a long way from that.

So does that mean for example starbucks will buy iphones and ipads and pay monthly fee for data plans and use iphone as their cash register?

Starbucks already has wifi. Don't most payment processors use some sort of Internet connection these days?

I would hope they are connected via a network cable, not wifi.

You hope the iPhone or iPad doing the payment processing with the Square device is connected via network cable? I'm afraid I have some disturbing news for you.

You hope the iPhone or iPad doing the payment processing with the Square device is connected via network cable?

No. I was replying to this...

Starbucks already has wifi. Don't most payment processors use some sort of Internet connection these days?

I think some, but not all, will pay data plans. Square doesn't require a data plan, as evidenced by it being compatible with the iPod Touch, which has no radio:

> Requirements: Compatible with iPhone, iPod touch, and iPad. Requires iOS 4.0 or later.

http://itunes.apple.com/us/app/square/id335393788?mt=8

Ipod touch has wifi.

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