 |
Square, Inc. – Bringing Disruptive Innovations to Financial Payments
The Development Of Square
In 2008, Jack Dorsey (Dorsey) one of the co-founders of Twitter , was ousted as Chief Executive Officer of the company due to some disagreement with the management team. However, he remained on Twitter’s board of directors as Chairman and held the second largest shareholding in the company. In the meantime, he was on the lookout for new projects to work on and chanced upon the mobile payments arena. In 2009, Dorsey had a mobile conversation with Jim McKelvey (McKelvey), a friend and former boss, who was working as a ‘Glass Artist’ — creating and selling glass artwork. McKelvey mentioned that he had lost out on a US$ 2,000 sale of glass faucets as he did not have the means to accept a credit card payment from a customer who did not have cash. McKelvey and Dorsey then discussed how small merchants lost opportunities in the payment ecosystem at that time due to their inability to accept credit cards... |
|
McKelvey and Dorsey agreed that though they were communicating with iPhones, which were high tech equipment with advanced processing capabilities, there were no hi-tech devices for easy credit card payments. They also talked about the cumbersome process involved in applying for a merchant account with a bank to be able to accept credit card payments. The steep charges of portable credit card swiping machines (that cost several hundred dollars), high set up fees, need to pay charges even without sales, and the stipulation that a contract should be signed with a card processing company for one or two years in advance, they felt, adversely affected small merchants......
