Pay by iPhone with mobile card reader

Mobile payment company Square today released a free credit card reader for smartphones.

The service uses a little widget that plugs into the mobile device’s headphone socket, and enables merchants to swipe customers’ credit cards.

Created by Twitter co-founder Jack Dorsey, the card reader lets businesses receive customers' payments directly to their iPhone, iPod Touch, iPad or Android-based smartphone.

Customers can sign their bill on-screen with a fingertip, and transfers are promised to take no more than two business days. The Square card reader is free to businesses who sign up for an account.

In an open letter on the Square website, Dorsey said he expected the device to be up and running in the US shortly, with a rollout in other countries to follow.

"Square intends to bring immediacy, transparency, and approachability to the financial world," Dorsey explained. "We want to enable all people to accept payments instantly, with access to all the information they need, in a way that feels amazing and engaging."

For updates, follow @Square on Twitter.