Square card reader: Now anyone in the US can accept credit cards

Headline updated to acknowledge that Square is a US-only service for now.

Remember the Square card reader and payment service from our first hands-on video in January at Macworld Expo 2010? Square makes it possible for anyone, whether an individual or small business, to take payments via credit card. Shortly after Macworld Expo, I signed up for the service; I finally received my free credit card reader yesterday.

The reader is a tiny square box that plugs into the audio port on iOS devices or other smartphones. Rather than using an expensive (usually $75 or more) “sled” reader like those used in Apple’s retail stores, Square developed a reader that did not use the dock connector or need the blessing of Apple’s “Made For iPhone” certification. These readers have no moving parts and are so inexpensive to manufacture that Square can give them away.

Anyone can sign up for the service and get a free reader. If you want to be able to split a bar tab with friends and have them pay you via credit card, you can get a Square account and reader, and then simply swipe your friends cards to get paid. Square takes 2.75% of the transaction + 15¢ per swipe if you can get your drunk friends to provide their finger-written signatures, and 3.5% + 15¢ if they don’t sign. Does that sound like a lot? To an individual, it might, but to small businesses who are used to hefty sign-up fees, monthly account minimums, merchant account fees, and higher percentages, Square is a hell of a deal.

Gallery: The Square Card Reader At Work