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Jack Dorsey, the creator of Twitter and co-founder of a new payments startup called Square, said the company will give away its credit card-swiping devices for free at the Le Web conference in Paris today. (See a Q&A with Dorsey here.) It’s a move that should help overcome the biggest hurdle for the startup, and probably help make its money back if it can take a small share of all payments it manages.
Square is a new product that allows owners of iPhones or iPod Touches to receive credit card payments. It’s a small device that plugs in to the phone’s audio jack. You can swipe a credit card through it, and it will turn the data from card into an audio signal that an app on the phone then turns into payment information. The payer can sign their name on the phone, and receive a receipt through e-mail.
It’s an interesting product because it will let regular people from friends trying to divvy up a dinner check and small 1- or 2-person businesses process credit card payments. It’s a serious challenge to the value of carrying cash.
Dorsey said the company will release an application programming interface that will allow other developers to build apps that can tie in Square payments to a business’ inventory management system or QuickBooks.
Square is backed by angel investors and Khosla Ventures.
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