Square, the mobile payments start-up headed by Jack Dorsey of Twitter founder fame, has been getting a lot of coverage lately.
Virtually any time I find myself at a food truck I end up using the small white square to swipe my credit card and sign the bill using my finger and an iPad (which almost always ends up looking like the stick figures I used to draw in grade school). Last week the mobile payments start-up announced a new partnership, allowing customers to waltz into one of the 7,000 Starbucks cafes using Square and make their payments without ever putting their hands near their pockets. Here's how it works:
"Hi, person at the cash register Your register over there has recognized my mobile device and my personal account associated with that device. I've pre-synced my credit card to my personal account so all you need to know is that my name is Tim Natividad and I'd like an iced coffee with room."
Derek Thompson's recent article on the meaning of Square and the benefits of a cashless society makes a few good points worth sharing:
Innovations that save time, even just a little bit of time, are real innovations, because in any advanced economy time and attention are currency and creating more of them can make us all richer.
Hard cash can't talk to us, but virtual cash can -- and it can make us better spenders. You could link a cashless account to a service like Mint that notified you when you went over your monthly self-appointed allowance.
Most notable is how much a movement away from cash can save an economy:
- A cashless economy can make us richer: "One 2003 study estimated that moving from a wholly paper-based network to a completely electronic one could save an economy 1 percent of its annual GDP (a $150 billion sum for the United States)."
Tompson's sources cite paper payments, as opposed to electronic payments, as the highest costs in our current payment systems. But another article from GOOD argues that the fragility of paper bills, which last only 1.5 years, results in additional print spending and switching to single dollar coins could save the US over $5 billion.
While the 22-year old in me is most immediately excited about the potential ability for Square to revolutionize the way I take cabs homes on Saturdays at 3 AM, it's hard to deny the impact the service can have on the larger economy, both in terms of time and actual money saved.