Square co-founder Jack Dorsey took to Twitter late Wednesday to announce a big milestone for the company: Square is now processing one million mobile payments a day.
Founded in 2009, the innovative startup has put a new spin on mobile payments by allowing smartphone owners to turn their devices into mobile credit card swipers. And the service is seeing some strong adoption, particularly among small businesses. Some 30,000-50,000 merchants are signing up for the service each month, which requires no long-term commitment or contract. Each transaction incurs a processing fee of 2.75%, and the service used to charge another $0.15 per transaction, but has since dropped that extra charge.
By simply signing up and creating an account, users receive a free piece of hardware (a little square the size of a nickel) in the mail, that they can plug into their iPhones to use as a credit card swiper for mobile (literally) payments. The payee then signs the touchscreen using his or her finger and hits submit, and the transaction is complete.
Intuit’s GoPayment is a similar mobile payment service that works by attaching a piece of hardware to a smartphone to read swiped credit cards. Other services are also bubbling up in the mobile payments space, such as PayNearMe, which offers a cash-based mobile payment solution for cell phone owners and Internet users who don’t have credit cards or bank accounts.
Square was recently hailed by Time Magazine as one of the fifty greatest inventions of 2010. "We have a lot of PTAs are using it for fundraisers," a company spokesperson said via email back in January. "We're also seeing individuals using it to start their own business like being a personal shopper or handyman."
In January, the startup closed a $27.5 million Series B round of funding led by Sequoia Capital, valuing the company at $240 million. Square previously raised $10 million in a Series A round led by Khosla Ventures in 2009.