So about a year ago I heard about Square, which was started by one of the co-founders of Twitter, Jack Dorsey. Square is an upstart with some lofty goals, but fills a solid business need.
For years, the small guy/entrepreneur has had to struggle with how to take credit card purchases, but didn't want to invest heavily by renting the machine that reads cards and paying that monthly fee to use their service.
Square has bypassed all that by waiving the monthly fees and giving you a free reader that is much more compact. The catch is that you use it with only certain cell phones, but the list is growing every day. As of now, you can use it on these phones (iPad, iPhone, iPod touch (2G+), Motorola DROID and DROID X, HTC Nexus One, Droid Incredible, Evo, Desire, and Hero (with Android 2.x update), Samsung Galaxy S series, Intercept, LG Ally and Dell Streak. So its not like you can't find a cell phone, plan and carrier that you won't like.
On my iPhone.
I signed up online and within a few weeks, I confirmed my account by filling out an online form and then received a note saying my reader had shipped. Two days later it arrived in the mail. The reader is less than the size of a book of matches and plugs into the headphone jack on your phone.
The Square Reader
I downloaded the software (free on iTunes) and was off and running. I charged myself a dollar by swiping my card (it took three swipes, but that is because I am not used to how fast to swipe it), plugged in my info and signed right on the screen with my finger. Sent myself a receipt through email. I was amazed at how easy it is to do this.
Square charges 2.75 percent of the transaction and a .15 cent fee for transaction, so that is how they make their money. But considering the convenience and the lack of a monthly fee and no big, bulky reader to lug around, its a great system.
I think this company has a future. The credit card companies may have to step up their game if they want to compete if this catches on.