By the time he reaches the counter, his picture has magically appeared on the iPad the shop uses as its payment terminal. The assistant identifies him by his photo and taps the screen to confirm a sale, and Mr Miller picks up his beverage. As he walks out, a receipt drops on to his iPhone.
Are smartphones about to swallow the payments business? Two events this week have given sharply contradictory answers.
The first was the $3.25bn valuation put on Square , a Silicon Valley payments start-up, by the company’s latest round of fundraising. This represents a huge bet, given that Square is a business with annualised revenues of only about $200m that is battling with the giants of the banking, retail and mobile industries.
The partnership of coffee and tech
Coffee and techies go together like donuts and policemen, one the voracious consumer of the other. They have named programming languages after the stuff. And so the alliance between Starbucks and Jack Dorsey’s Square mobile payments start-up seems quite natural.
Starbucks has never been shy of experimenting with technology, having been one of the first US coffee shop chains to offer customers free wi-fi access. Starbucks also has its own mobile app, which allows customers to pay for their coffees using a phone. Although these mobile payments are still just a tiny fraction of overall revenues, it is considered one of the most successful mobile payments systems in use so far. Read more
Tech news from around the web:
British billionaire Sir Richard Branson has made a ‘multimillion-dollar’ investment in mobile payment start-up company Square, a spokesperson for the company has told Reuters. The move follows a $100m investment led by venture capital firm Kleiner Perkins Caufield & Byers and an injection by credit card company Visa.
Adobe Systems is said to be scrapping its move to bring its Flash Player software to smartphones and tablets, CNET reports. The Flash browser plug-in is widely used on personal computers but has so far only reached a fraction of the mobile phone market. Read more
Index and Charles Dunstone buy into iZettle, the European Square
Carphone Warehouse co-founder Charles Dunstone and Index Ventures have invested €8.2m ($11.2m) in iZettle, Europe’s answer to mobile-payment firm Square.
Sweden’s iZettle operates a payment system for small or nomadic merchants – be they market traders, window cleaners or conference-goers – through a card reader that attaches to the bottom of an iPhone. Read more
Tech news from around the web:
Facebook is updating its photo viewer, ZDNet reports. Facebook Photos will look cleaner, easier to view and bigger.
The Atlantic’s Alexis Madrigal reports that the mobile payment service, Square, is growing through out the US. Data from the company shows that “just about every major city and plenty of smaller places have someone using the device”. Read more
Square card readers could enrich criminals, expert says
The Square personal commerce system, which allows iPhone and iPad users to accept credit cards, could also make it easy for people to convert stolen credit card information into cash, security researchers said on Thursday. Read more
Dorsey channels Jobs, attempts payments for the iTunes generation
Jack Dorsey, the creative talent behind Twitter, has clearly taken a leaf from Steve Jobs’ playbook. But revolutionising in-store payments will be a lot harder than persuading people to pay for digital music. Read more
Square doesn’t work with iPhone4 (Updated)
Square, the much-hyped mobile credit card processing system created by Twitter co-founder Jack Dorsey has a big problem: it doesn’t work with the iPhone4.
In a blog post buried deep in the support section of Square’s website, the company acknowledges that the Square card reader interferes with the already problematic iPhone4 antenna.
“This renders our card readers inactive for your iPhone4,” the company wrote on October 9. “We are working on redesigning our card readers and will be contacting our iPhone4 users as soon as they are ready for shipment.”
Update: Square has clearly been scrambling for a fix for awhile now. The day after this post was published, they emailed to say that, “As of today, we have shipped new card readers to to active users who are accessing Square via an iPhone 4.” Read more
Twitter inventor’s Square takes shape
Serial entrepreneur Jack Dorsey is pointing out the origins of his new start-up, Square, as he stands in the middle of its new office space inside the San Francisco Chronicle building.
It is move-in day in a section of the newspaper’s emptying headquarters that now has to be sub-let. The Chronicle, founded in 1865, has seen its staff and circulation shrink by more than a quarter in the past three years as people turn to the internet for their news. Read more
| About this blog | Blog guide |
Richard Waters has headed the FT's San Francisco bureau since 2002 and covers Google and Microsoft, among other things. A former New York bureau chief for the FT, he is intrigued by Silicon Valley's unique financial and business culture, and is looking forward to covering his second Tech Bust.
Chris Nuttall has been online and messing around with computers for more than 20 years and since 2004 has reported from the FT's San Francisco bureau on semiconductors, video games, consumer electronics and all things interwebby.
Maija Palmer has been writing about technology for the FT since 1999 and is fascinated by cybercrime, privacy and all the other issues of the information society. Based in London, she covers European tech companies and hopes that they won't all get acquired by American rivals.
Robin Kwong is the FT's technology, media and telecoms page editor in London. Formerly he was the Taipei correspondent and wrote about the companies that manufacture the vast majority of the world's computers and gadgets. He is interested in the intricacies of the technology supply chain and how China is increasingly changing the tech landscape.
Tim Bradshaw is the FT's digital media correspondent, and has just moved from London to join our team in San Francisco. He has covered start-ups such as Twitter and Spotify, as well as the online ambitions of more established media companies, such as the BBC iPlayer. He also covers the advertising, marketing and video-game industries. Tim has been writing about technology, business and finance since 2003.
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