Square’s “Mobile Wallet” Service Sets Stage for Pay-By-Voice, Maybe.
As described in this post by Clair Cain Miller on “Bits” the New York Times Technology blog, mobile payment startup, Square is very close to launching applications that enable people to authorize payments by using their voice over a smartphone. However, those of you who might expect a voice biometric-based application to be part of the user authentication process will be disappointed… at least for the time being.
Today Square formally rolled out two products. For merchants, the company offers Square Register, an application and small card reader simplifies retail checkout in a way that integrates sales tracking, and customer communication. It is designed to foreclose on offers from the makers of Point of Sale Terminals, like Verifone, who are in the process of convincing their customers to convert to NFC (near field communications) based systems. The second product, Card Case, is designed for anyone who normally carries a wallet with credit or debit cards as payment vehicles. As Jack Dorsey, Square CEO (and one of Twitter’s founders) explained at a press conference, it transforms an iOS or Android-based device into a repository for multiple, virtual payment cards, making them into the “companion” to each Square Register.
The way it works, according to NYTimes Miller, is as follows:
When it comes time to pay, the shopper opens the Square Card Case app, which looks like a brown leather wallet full of cards for stores nearby. The shopper clicks to open a tab at a store and then gives the merchant his or her name. The shopper’s credit card number is already stored with Square, and the merchant sees a list of shoppers who have recently opened tabs nearby and chooses the person’s name. Merchants see a big photo of the Square user so they can confirm it is the same person.
Thus, Card Case enables customers to make payments by simply giving their names as in, “Charge it to Dan Miller” Voice biometrics followers will recognize right away that there is a dream like quality to such an idea. Presumably, the individual would have had to enroll in the system and provide a sufficient amount of usable utterances to support real-time ID proofing. Instead, Square’s Card Case uses a couple of factors, “something you have”-in the form of the physical Card Case (a brown leather thing); something you are – in the form of a large photo displayed in the Card Case; and finally your location, in that merchants using Square Register are presented with a list of nearby Card Cases along with the names of their owners, acceptance is a matter of choosing the right name from the list. For purchases of over $50, shoppers will also have to enter “something you know” in the form of a PIN.
To date, Square had already shipped 500,000 card readers for iOS and Android phones. The merchant services are up and running in San Francisco; New York; Washington, DC; St. Louis; and Los Angeles. Square’s revenue model is to take a 2.75% transaction fee for swiped credit cards or 3.5% + 15 for credit card numbers entered manually.