JAMES MCKELVEY AND JACK DORSEY: TURNED A SIMPLE INCONVENIENCE INTO A BILLION DOLLAR BUSINESS!

BY Ojie KING

Not many people have heard of the ‘SQUARE’, probably because it is not yet usable outside of the United States, but thanks to us, now you have. You’re welcome. There is an interesting, well-detailed article here, so you can check it out as well. But I will highlight, the essential points below.

The square came about out of frustration from James Mckelvey. He sells hand made crafts from his studio but only collects cash and noticed that whenever someone came in with a credit card (as expected, it is 2000’s after all, hardly anyone carries cash anymore), it was always awkward for payment (i.e. either the person goes to the ATM, which is unlikely or the sale is lost). So, he discussed it with his friend Dorsey and they both investigated how the merchant credit card accounting system worked and found out there was indeed a way by which credit cards can be accepted, without having to pay high fees (which, by the way is the major reason why small shops avoid pos terminals). They constructed a prototype in a month and all is history now.

With the square (introduced in 2000), anybody can accept credit or debit payment now. They simply download the app and plug a little plastic cube into the headphone jack of their iPad, iPod touch, iPhone or Android phone (well, when I said anybody, anybody who has the above devices). Once the card has been swiped through the reader, the customer will sign his or her name on the touch screen instead of a pen. Interestingly enough, the customer can even tip the merchant. He or she simply has to add the tip either by percentage or by the exact figure, and then puts in their email address or phone number and your receipt comes to you in the form of an SMS or an email. The customers are charged regular by their banks or credit card firms and Square clears up its net funds with merchants nightly instead of monthly. Its use is so relevant that Reshma Saujani, a democratic candidate for the New York 14th District, uses it to take donations during her campaign events. As she has pledged to take no funds from political action committees, she simply makes use of the square for door-to-door and big outdoor events.

Interesting is it not? Two men basically saw that there was a need out there, which came from an inconvenience and they sat down, got their heads out of the boxes and basically made up their own pos terminals to suit people of that particular need {all the James Mckelvey’s out there}. Oh and did I mention that the company has been valued at 1billion dollars?

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2 Comments Add yours

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