Square & Mobile Payments. What is it? How does it work?

Point of sale from your smartphone or tablet?

There is a lot of chatter about different mobile payment platforms these days, and sometimes we take it for granted that everyone knows what they are and how they all work.  But hey, let’s face it: mobile payment platforms have not yet become fully mainstream.  So today we’re taking an opportunity to explore one of the more popular mobile payment programs in greater detail.  Let’s learn a little more about Square.

Square, Inc. now provides an app for smartphones that converts them into a cash register or credit card terminal.

This app can be used on an Android phone, iPod, iPad, or iPhone. A free credit card reader comes with the app.  The square-shaped card reader is small enough to fit inside a wallet, and whenever a buyer wants to pay for a purchase or service, the credit card is swiped through the reader and the app processes the payment. Whenever the Square app is used, all the user has to do is plug the reader into the phone’s audio jack so that it becomes activated for credit card readings. The Square app is perfect for small businesses that have limited space and want to accept an alternative form of payment besides cash.

The app can be downloaded for free through the Square, Inc. website or purchased through the Apple store.  In some cases, a rebate is available. Once the app is downloaded, all the user has to do is link it to their bank account so that payments can be received immediately. Payments are deposited into the business’s bank account the following day after a payment transaction. To set up the app so that it is linked to your bank account, all you have to do is enter the routing and account numbers on the bank account page on the Square, Inc. site.  For security, the app deposits and withdraws a small amount of change into your account, which you must then confirm on the site.  By entering the correct amounts, you confirm that you are in fact the owner of the account. Once the bank account is linked to the app on your smartphone or tablet, you can use it immediately for business: selling products and services to customers and accepting mobile payments. The Square app also allows a business to maintain a customer list and manage inventory.

This app is perfect for small businesses that want to accept credit and debit cards for payment. It only takes a few minutes for the app to be ready for the first credit card payment when a user signs up.  Square, Inc. also accepts all major credit and debit cards. Having the Square, Inc. app can increase business opportunities for those who like to shop or go to special events but do not carry cash with them. What I like about the app is that it allows the user to customize the checkout screen with photos, prices and categories. On the payment screen, a field appears where the customer signs their name using their fingertip. A receipt can be generated by sending the customer a text message or email. The Square app also has a directory available that a business can be listed in. Being listed in the directory is at the discretion of Square, Inc.

There is a charge of 2.75% per swipe for credit cards, automatically applied for each sale. Square uses VeriSign Trusted and is Tier 1 PCI Compliant. Firewalls protect smartphone connections between networks to ensure privacy and security.

The Square app is very easy to download and use. Having a credit card reader attached to a phone is very innovative in retail technology as it replaces the need for a separate credit card terminal.  We can see potential for the Square application in small retail businesses who have brick and mortar stores as well as those that operate at smaller venues like seasonal events, festivals, and shows.

NFC Malware Warning from McAfee

McAfee, a security technology company best known for its anti-virus software, recently issued a warning about the potential for devices with Near Field Communication (NFC) capabilities to be infected with malware. The ease of transferring information with NFC—a simple tap—means that malware could also be easily transferred between smartphones. McAfee warns that as NFC-enabled devices become increasingly common, they will also become more tempting to cybercriminals.

Luis Blando, McAfee’s vice president of mobile product development, explains, “Cybercriminals are exhibiting greater levels of determination and sophistication leading to more destructive, multi-faceted hacks that are harder to spot, and thus warrant a greater degree of security and vigilance.”

Mobile payments via NFC also present a potential security problem. Imagine this: a carefree customer pays for a purchase with his phone, unaware that the phone was recently infected with malware. Through that payment, the cybercriminal responsible for the malware collects his victim’s mobile wallet payment information and then goes on a spending spree all his own. Basically, what we’re looking are the newest forms of identity theft and computer viruses. They may sound scary, but their existence is a sad but unavoidable progression. There’s no need for business owners using NFC to panic—but there is a need for vigilance, and for protection.

McAfee is not the first to acknowledge this potential security threat. The New York State Office of Cyber Security warns, “Risks with using NFC and Bluetooth include eavesdropping, through which the cyber criminal can intercept data transmissions, such as credit card numbers. NFC also has the risk of transferring viruses or other malware from one NFC-enabled device to another.” The Office of Cyber Security offers a slew of advice regarding protecting one’s smartphone, including advising that people disable their phones’ NFC capabilities when they’re not needed. The office also advises the use of security software—and there is security software available for smartphones.

McAfee, for example, offers mobile security software, which can support an array of devices, including iPhones, iPads, Android and Blackberry. And if this warning is any indication, they are likely to increase their focus on offering protection for NFC-enabled devices. That’s how cybercrime works after all—as the criminals get sneakier, better protection is developed, requiring the criminals to get even sneakier, requiring security to improve, and on and on. Such is the circle of cyber-life.

QR Codes Best Business Practices

Mobile barcodes, also known as 2D barcodes or Quick-Response (QR) codes, are fast becoming a foundational element of digital marketing.  They allow brands an instantaneous connection to their target audience.  Businesses have the opportunity to provide an engaging and interactive experience, all at the scan of a consumer’s cell phone.

While they are fun and cool in and of themselves, almost like a new toy for businesses and consumers alike, the need for businesses to use them effectively and wisely in order to achieve marketing success, as well as to promote the overall acceptance and success of mobile barcodes, is a serious matter.

Below are some best practices intended to help businesses, brand owners, and agencies achieve maximum success from their mobile barcode campaign.

1. Plan ahead.  These days, any mobile marketing campaign, whether through digital or traditional media, these days should be centered around mobile barcodes.  If the 2D barcodes are added as an afterthought, the campaign will probably not succeed.  Consider the mobile barcode as a key element of the campaign from its earliest planning stages.

2. Design with your consumer in mind. Don’t disappoint your customers by offering them a cool QR code to scan without any value or relevance attached.  Coupons, discounts, information, entertainment, and utility, are all possible ways to make the campaign a rewarding experience for consumers.  Keep your target audience in mind, and give them what they want in a way that suits your business.

3. Design and placement. Consider the placement and design of thee mobile barcode as important as any other aspect of your advertisement.  Thoughtfully consider where the 2D barcode will be placed.  Make sure it is easy for the customer to scan.

  • For outdoor ads, make it at eye or arm level.
  • For print ads, make sure placed prominently on a flat surface, unhampered by folds or other obstructions, and surrounded by enough white space to be easily scanned.  A minimum resolution of 1×1 is suggested to comply with most mobile cameras.
  • For a screen environment, prominently display the QR code for at least 15 seconds to give viewers enough time to scan the code.  Also make sure the size is appropriate to the type of environment.  For example, will it be displayed on TV, in a movie theatre, or at a pro sporting event?

4. Color. Print mobile barcodes in black and white to ensure successful scanning by the most mobile devices.  There are some proprietary mobile barcodes that use color, and these would be an exception to the rule.

5. Branding. Again, to facilitate scanning success by most mobile devices, print your mobile barcodes without branding or images included or overlaid on the code.  Added graphics can damage the code’s integrity and make it difficult to scan.

6. Open standards. Follow open standards (such as QR, Datamatrix) to ensure an optimal consumer experience.  Proprietary solutions may interfere with universal customer access, impacting market penetration and global reach.

7. Education. Nearly half of the US population has seen and scanned a mobile barcode.  But it is still a new technology, and there is a need for an easily understandable, informative display of mobile barcodes.  Placing an explanation of what the code is, how it works, and what it offers the customer, will help promote consumer education and continued acceptance of the technology.

8. Optimize for mobile. Make sure you’ve considered what consumers will get after the scan.  Consumers may quickly get frustrated trying to navigate a PC-designed web site on their mobile device.  The screen size of a mobile phone is obviously much smaller, those using their mobile devices are often ‘on the go,’ and they want quick access to information so they can get back to what they were doing.  To reach this audience, it is necessary for brands to offer a customized mobile experience that is cohesive, fun, and convenient, and rewarding to use.

9. Test and test again. “Dead links,” or codes that lead to the wrong URL, the wrong information, or no information, will give customers a bad impression of your brand as well as mobile barcodes in general.  Be sure to test for the correct resolution address.  Also test the mobile barcode with a variety of mobile devices and applications to ensure success for your audience.

10. Define Your Objectives. In order to know how successful and effective your mobile barcode campaign is, you need to have clearly defined goals and objectives.  Barcode management platforms help you track analytics, time and location usage, in order to make smart purchase decisions, improve your message, increase the success and ROI of future campaigns, and continue to engage your customers with rewarding experiences.

11. Plan for consumer engagement. A customer’s first scan of your mobile barcode is only the beginning of the relationship, like the initial handshake.  Continue the dialogue and maintain the relationship by planning early and often how to engage them effectively, adding value with each interaction.