Smartphone payment pioneer Square looks to get its first serious competition in the form of an accessory for tablets and smartphones from VeriFone that allows users to accept credit card payments.
If VeriFone's plan sounds familiar, it's because Square has already done it: back in 2010 Twitter co-founder Jack Dorsey announced an add-on for iPhones that turned the headphone socket into a reader capable of decoding the magnetic stripe on credit cards.
Coupled with a software interface that allowed for signatures to be entered with a fingertip, Square's creation allowed anyone with an iPhone to accept almost any credit card as payment for goods and services. Users received their Square dongle free of charge, with Square taking a cut of each transaction in the same way as a traditional payment processor.
Since then, Square has gone from strength to strength, adding support for smartphones and tablets based on Google's Android to its portfolio along with an iPad app that acts like a virtual till. News that the company had received $100 million in funding this week left many in the industry wondering if it would ever receive competition.
The answer, it appears, is yes. During an interview with Bloomberg, VeriFone's chief exec Douglas Bergeron confirmed that his company will be launching an add-on accessory for Android and iOS devices that allows credit card payments to be swiped and payments taken.
Unlike Square, VeriFone is believed to be using the leverage of its considerable name recognition to convince large companies to adopt its product. While Square targets smaller companies with its offer of a free card reader and simple payment processing, VeriFone will likely hire or sell the hardware and allow companies to use their existing payment processing accounts.
Bergeron is keeping quiet about prices and a suggested release date, but VeriFone could have one major weapon on its side as it takes on Square: it's an international company.
Square has proven incredibly popular in the US, but thus far has only made its services available in 50 US states. Although an international launch has been hinted at for a while, it has yet to materialise. If VeriFone can launch internationally, it will provide an option for those who want to take credit-card payments on their existing mobile devices in other countries, potentially freezing Square out of international markets before it has a chance to launch.