NEW YORK – Square, the brainchild of Twitter co-founder Jack Dorsey, announced earlier this week that they have devised a service to make mobile payments even easier. With Square Cash, the company allows anyone with a debit account to send money via email.
Unlike the original Square service, a user does not need a square account, app, or peripheral device to use Square Cash. Instead users simple email payment to the recipient by adding email@example.com in the ‘Cc’ field. By doing so, this will notify Square to send both the sender and the recipient an email notifying them that payment is on the way along with a link for the sender to input their debit card number and expiration date.
To accept payment, the recipient will click on a separate link to input their debit card information. According to Square, payment will be received within one to two business days. If users prefer not to use email, they have the option to download the Square Cash app for their mobile devices running on Apple’s (NASDAQ:AAPL) iPhone or Google’s (NASDAQ:GOOG) Android operating system.
According to a spokesperson for Square, the company is covering the merchant fees associated with debit card purchases. When asked if the no-fee service is a temporary promotion, the spokesperson said that the company has ‘no plans regarding fees at this time.’ Google is currently allowing users to send up to $250 via credit or debit card without a 2.9 percent service fee, nor the minimum fee of $ .30. This promotion ends on October 25.
While PayPal (NASDAQ:EBAY) allows users to send money via PayPal’s website or app for free when using a bank account; transferring money via a debit or credit card requires a 2.9 percent fee plus $ .30 per transaction. The send has the option to decide whether the sender or the recipient will pay the fee.
Square is currently a private company, but several analysts expect the company to go public in 2014. According to analysis of the company’s Series D fundraising, Square has a valuation of $ 3.2 billion. The move to introduce email payments and no cost mobile payments is clearly a challenge to Square’s much larger competitors and investors should follow the success of the program and competitors reaction to get a better idea of who will win out in the mobile payment space.