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The New York Times reports on a mobile payments start-up called Square, which is trying “to make cash obsolete by giving small businesses, like farm stands and cafes, a way to turn their cellphones or tablet computers into credit card terminals.,” and now also is “trying to make wallets obsolete, too, by upending the way that consumers pay for purchases.”

Here’s how the Times explains the concept:

“Square’s goal is to replace cash registers and point-of-sale terminals and the companies that make them, like Verifone. Square is also taking on the many start-ups that offer cellphone loyalty cards, like Foursquare, and competing with Google, Apple, PayPal and major credit card companies and banks to provide mobile payments.

“Square’s new payment services are available at only 50 merchants in New York, San Francisco, Washington, St. Louis and Los Angeles. Shoppers can use the Card Case app to search for those businesses, pay their bill and store receipts. A shopper opens the app, which looks like a brown leather wallet, clicks to open a tab at a store and then gives the merchant his or her name. The shopper’s credit card number is already stored with Square. Merchants see a photo of the Square user so they can confirm it is the same person.

“With the Register feature, merchants can appeal to nearby shoppers who have the Square app by posting deals or menus. They can also store receipts digitally and track customer behavior.”
KC's View:
It seems like a stretch to believe that one new start-up will be able to centralize the entire transaction process in one system and successfully do battle with all the other players involved. And there certainly seems to be plenty of opportunity for either fraud or invasion of privacy if the system somehow breaks down...

Still ... I have to admit that I am fascinated by all this, and would suggest that whether Square succeeds or not, this certainly seems like the future of how commerce will be transacted in an entirely frictionless way. Or at least one possible future. And probably one that will come true a lot faster than many of us would expect.