Square streamlines payment via mobile 'tabs'

On Wednesday, the San Francisco company took their simplifying of the transaction a step further with an update to its Card Case app.

"We want to make using Card Case so easy that you don't even have to reach for your phone or take your wallet out of your pocket to buy something," said Megan Quinn, Square's director of products, in an interview. "And we've done that. Now you can pay just by saying your name."

So how does that work?

The Card Case app, Square's take on the mobile wallet concept, currently uses location data to determine where a user is so that person can pay for things using credit or debit cards linked to their Square account. In the past, this meant tapping on a merchant's iPad or a user's iPhone to approve a purchase from within the app.

What's different now is that Square has updated Card Case to recognize when a user is within 100 meters of a business using iOS 5's new geofencing abilities.

That means that when a user has turned on the "auto open" tabs feature for a business within the Card Case app, a tab for purchases is opened every time they walk into a business without them ever having to open up the app itself.

When it comes time to pay, "you just give the merchant your name and if you're using the iOS 5 version of the app, your tab will automatically open and on their iPad or computer they'll just see a photo of you and your name and they simply tap your name and the payment happens in that capacity," Quinn said.

"It's similar in spirit to a bar tab, where they've already got your card and you tell them your name and they charge it. This requires no new or unusual behavior. You don't have to wave your phone, load money to anything, tap anything. You just walk in and then say your name to pay."

More than 800,000 businesses use Square's small white plastic cube credit and debit card reader, which plugs into the headphone jacks of mobile phones and tablets to perform transactions. The start-up has grown quickly, giving the Square card readers away for free, raising capital from the likes of Visa and adding heavyweights such as former Sun Chief Executive and investor Vinod Khosla and former U.S. Treasury Secretary Lawrence Summers to its board of directors.

Thus far, Square's card reader and apps have caught on because of the "transparency and simplicity" the company has brought to transactions for businesses, Quinn said.

"This update is about bringing that same transparency and simplicity to the consumer side as well," she said, noting that, as always, receipts show up in Card Case from all purchases made with the app.

The update to Card Case also brings in a few other new features. Merchant cards - essentially digital business cards - in Card Case are easier to update so businesses can change address, menu and biography information in real time, Quinn said.

And now merchant cards can also be synced with a business's Twitter stream.

"If you're looking to see what businesses are near you that use Square, you can search within the app, then check out a merchant card to get details on the businesses," Quinn said. "And now, if one of those businesses tweets about a special discount or offer, that will show up in the app too. And if you want to tweet at a business, Card Case can launch you into Twitter to do so."

The Twitter integration makes a lot of sense for Square considering that Dorsey, its chief executive and co-founder, is the executive chairman and a co-founder of Twitter.

At eight weeks since Card Case has launched, about 20,000 merchants have opted in for the service to accept payments, Quinn said. As Card Case improves and becomes easier to use on both the merchant and consumer side, Square hopes it will see the growth that its Square card reader has seen, she said.

"We believe that meaningful customer loyalty happens organically," Quinn said. "You go back to a business because you feel comfortable there. With Card Case, we're looking to bring that feeling of being familiar to more places you shop. We want it to feel like you're known by name at the coffee shop you always go to. And in the process, we've really removed the artifact of the merchant and the register from the payment experience."

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