As we were getting ready to leave, I noticed parents lining up to sign their kids on for more classes. Near the end of each conversation, a credit card came out and the organizer swiped it through her Square reader hooked up to her iPhone.
Forget about the mind-blowing nature of this transaction. We all know that five years ago, nobody could have imagined such a thing. What clicked in my mind was how second nature this transaction has become in Silicon Valley. Whether it's a dance class instructor or a food truck driver, people are willing to hand their card over to be swiped through this device.
Now, I know there's a level of comfort people have simply because they're more comfortable with technology and everyone seems to have a smartphone nowadays.
But what I started thinking about was why people seem to be so willing to finalize a transaction in this way. Afterall, who knows what could be on the dance coordinator's iPhone screen? She could have been stealing the info for later use.
I think a lot of this comes from the fact that this mind-blowing technology is couched in something we're all familiar with:
- The physical card itself
- The swipe to pay.
We whip out our cards and swipe away at the grocery store, the gas station, and the ATM. At those locations, the machines are hard wired devices with presumably high levels of security to prevent theft. The mental leap of doing online transactions is actually pretty big if you think about it. There's good reason to distrust random websites and avoid entering in your CC info there. But there's something about the physical swipe of a CC that lends an air of security. Nobody typing in your CC info. Just swiping and you get an email to confirm.
There are lots of payment solutions out there. However, I believe part of the reason Square is succeeding is by tying their payment method back to something everyone understands: the card in your wallet and swipe through a device. Of course they've made things easy for small business owners too, but ease of setup & standardized fees can only go so far if the consumer doesn't feel comfortable using that payment method.
And that's exactly what Square is addressing...the REAL need isn't simply the ABILITY to pay, but having confidence in the WAY to pay. And the way they're providing that confidence by tying it to something that's been in our pockets for years.