Visa invests in mobile payments startup Square

Payment and credit solutions giant Visa has made an unspecified investment in Square, whose increasingly popular mobile payment solution enables users to accept credit and debit card purchases anywhere and anytime via iPhone, iPad or Android smartphone. A Visa executive also will join Square's advisory board.

Twitter co-founder Jack Dorsey launched Square in late 2009. To leverage the solution, smartphone-enabled sellers input the transaction total, swipe the consumer's card through a small dongle that plugs into the device's audio input jack, and Square handles the remainder of the transaction, claiming a flat 2.75 percent fee. Square currently processes more than $1 million in transactions each day--in addition, more than 100,000 merchants nationwide sign up with the service each month. In all, the firm processed $66 million in payments during the first quarter, and expects that number to triple during the current quarter--earlier this month, Apple (NASDAQ:AAPL) began selling the Square card reader unit via the online Apple Store and its brick-and-mortar locations.

Although Square threatens the traditional credit card transaction model, a Visa spokesperson told The New York Times that Square does not compete with its products: "On the contrary, we believe that Square helps to drive acceptance of payment cards in a segment that has been historically underserved." More than 27 U.S. million businesses do not accept Visa cards, the report states.

For more:
- read this New York Times article

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