Why Square could be one of the greatest Trojan Horses in recent tech history | Hacker News Reader

Why Square could be one of the greatest Trojan Horses in recent tech history

chrishexton.com

6 pointschexton10 comments

With that title I was hoping to read a good conspiracy story about Square running some form of malware stealing users' data: I'm disappointed.

Change the title. Or make up a malware story to go with the tone of the title.

I feared that it might be misinterpreted as such. I'll consider that. Thanks.

This article is mostly nonsense.

I've said it before and I'll say it again: the card infrastructure is too old. Unless Square plans to replace it from end to end, it won't be going very far and will likely end up as a large acquisition for Visa.

See http://www.quora.com/Aaron-Greenspan/Paying-With-Your-Phone-....

Aaron,

I have read your Quora post and I agree that the credit card system is antiquated, outdated and leaves a lot to be desired. I certainly feel this as credit card user and as a member of the startup community who knows the possibilities that are out there. I wrote the article considering the perspective that when Square started I was rather skeptical, it felt like a bit of a gimmick, yet their latest update suggests they are moving away from merely providing a piece of hardware that allows a merchant to accept credit cards and considering a more holistic system.

The new direction is at least interesting as the introduction of Card Case means they could the a customer's identity and credit card to their mobile phone and I can't see why down the road they couldn't use a variety of fund sources, i.e. not just credit cards.

I do think Square has a long, long way to go.

Where they started has given them some traction to date and I think that's because at this point in time, albeit antiquated, credit cards are well understood. In my opinion it's good to see Square adding extra features to their initial offering as I think it will need to in order to survive.

Hi,

I compete with Square, so I'm admittedly biased, but I know something about this space.

We've built a full-featured POS system and API from scratch that runs in a web browser. "Full-featured" is an important descriptor because it means a lot of things:

- working with spring-loaded electronic cash drawers

- working with RS-232 serial line printers of various types

- handling nested products and product versions

- tracking hours for payroll

- working with all kinds of industries, not just coffee shops

- handling inventory

- integrating with accounting software (our own)

- handling business transactions

- working with existing legacy POS systems

Square doesn't do any of this right now. With enough money and resources it could eventually do some of it. However, there are competitors out there who can do more and who can do it for less money because they're not as tied to the existing infrastructure.

It's also somewhat amusing that we came out with FaceCash Register in March (Square Register?) and adopted "Pay with your face" as a motto ("Pay with your name?"). We made this image in 2010 (https://s.facecash.com/images/home1.jpg) and they posted this one last week (http://media.bestofmicro.com/square-card-case,S-T-293933-13....). Such is life in the Valley.

Anyway, maybe I'm wrong about all of this, but I don't think I am. I've bet a lot on it. Square is a really nice product, but as I've also said before, I think they just made the most beautiful eight-track player the world has ever known.

Aaron

I find it a bit perplexing that you feel Square is building a solution that is already outdated and yet the system you've bet a lot on, on paper, sounds like existing legacy POS systems that have been around for years with the sole exception of being web-based. I won't deny that credit cards are antiquated, but the article's title and main point was talking about how the card reader and simple app was their "trojan horse" to get into the small merchant market and then build on the install base with other offerings, including payment systems. That kind of renders the credit card argument moot as Square could just as easily adapt to new payment methods as a traditional POS could. Not to mention, cash (to me) is far more antiquated. Of course that's probably not the best argument as I don't see cash disappearing anytime soon, but I certainly believe credit cards (as they exist now) could be replace within a decade.

As for your other points, I agree that they're essential features in a traditional POS system. My only experience with using a POS was at a local pizza shop in Ohio and we used all of those features on a daily basis. However, there's no reason we couldn't have went with a pure digital solution except for maybe receipts. Some customers just want that paper receipt. But I do agree that Square has a long way to go before it becomes capable of being such a system and there will be many businesses who just like doing things the "antiquated" way with a traditional POS. I think there is room for both in the business world.

FaceCash is nothing like the existing payment system. It's a lot more than a POS; it's a unified payment and accounting system capable of storing and organizing more payment information than any other system in the country. As part of that it has a web-based POS and API, but that's just scratching the surface.

I think the article makes good points and it's true that the current dongle is a brilliant acquisition tool that will likely give way to better mechanisms in the future. Square needs to stick with the dongle for now so as not to give the perception that it is inferior. It's a bit like Apple's release strategy: the features are always a bit behind but the overall user experience is exceptional and creates demand for future releases.

New payment systems face a nearly insurmountable chicken-and-egg problem. By taking advantage of an existing infrastructure, one side of the equation is addressed neatly. The FaceCash thing is more reminiscent of PayByTouch (minus the fraud, I suppose) where you've got zero merchants, zero account holders and you're trying to push an unfamiliar and even awkward user experience.

I disagree with your analogy, but you're right that it's difficult to get started.

No it will never be a major player. It is neither necessary nor enough to have cheap POS to run small business.

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