Why I'm excited for Square vs Verifone: The Revolution
Normally I don't like it when startups describe themselves as, "Trying to revolutionize X." Everyone is trying to start a revolution, and very few companies really end up affecting massive revolutionary change in the world. Instead, it may be more appropriate to be honest and say that a startup is, "Trying to carve out a small piece of market X." After all, a small piece of a large market is generally good enough.
In the case of Square, the new mobile credit card processor from Jack Dorsey, I really do believe that there is major potential for a revolution brewing. I'm even more excited that Verifone rushed out PAYware mobile to compete, and force the pace of innovation and competition. The revolution that I'm looking forward to however has nothing to do with the ability to accept credit cards from a cell phone however. Instead it's about the changing paradigm of paying for things, and organizing all the information associated with the purchase.
Consider this lists of wants as catalysts for the payments revolution:
- No paper receipts - why would I want a 3 inch piece of paper when I buy a soda?
- Searchable online receipts tracked at the item level and not the merchant level.
- Centralized online transaction manager containing said receipts so that you only have to go to one place to organize all your spending.
- Automatic expense report generation and tie-in.
- Electronic submission of expenses and receipts to IRS.
- Don't have to carry 6 different credit cards.
- Don't have to carry even 1 credit card.
- Ability to pay anyone, anywhere.
To me the mobile payment hardware war that is about to be waged behind Square with it's smart founders and investors, and Verifone with it's enormous pockets and commercial connections, will be less about who wins the ability to accept payment on the iPhone, and more about the race for building a platform that can support all of the above from the consumer side. People use credit cards because they're convenient, but there's been very little iteration in the area for many years. Now all of the sudden there are new conveniences that customers are looking for, and whichever vendor allows businesses and individuals to provide their customers with the greatest level of convenience will have a good chance of creating a real revolution.
