Square Mobile Payment System Goes Live

PayPal started the credit card revolution, and Craigslist empowered regular people with the ability to clean out the garages without forking over fees to eBay. Now, the next movement is about to begin, with Twitter co-founder Jack Dorsey beginning to ship out hundreds of free credit card dongles that plug into the headphone jack of an iPhone, Android phone or iPad.

The system is called Square, and the free app is available to download now for iPhone OS and Android. Basically, you fire up the app, attach the dongle, punch in the amount (say, whatever you agreed on for selling a couch on Craigslist), and then have the buyer swipe their credit card through the adapter. No personal information is stored, and the buyer has to sign the phone with their finger. Once that happens,an SMS or email is sent to the buyer confirming the purchase.

It's a pretty simple solution, and it has the potential to revolutionize small business. It's quite difficult to get a proper credit card system setup, and the fees can be outrageous. With this, setup costs are essentially nothing, and the fee structure is much more reasonable. The only thing better than this would be contactless NFC payments, but the U.S. is a long, long ways from having that.