How Square Works

By: Dave Roos
The Square device can turn your smart phone into a credit card machine. See banking pictures.

Cash is so 20th century. Consumers are addicted to the convenience of plastic. Have you ever used a credit or debit card to pay for a pack of gum? You're not alone. In 2012, American shoppers used cash to pay for only 27 percent of retail transactions. The vast majority of transactions were paid with credit cards (29 percent) or debit cards (31 percent) [source: New]. But even credit cards are starting to feel old-fashioned. More and more consumers are leaving their wallets at home and doing their shopping entirely with their smartphones.

Square is a popular service that allows you to buy, sell and send money using any Apple or Android mobile device. With three free mobile apps — Square Register, Square Wallet and Square Cash — Square is designed to help small businesses accept credit card payments and to help consumers transition to a cashless, cardless lifestyle.


Square is one of several leading players in the emerging world of mobile payments. According to research firm Gartner, more than 200 million people worldwide made payments with their smartphones in 2012, either by swiping their device through a special reader or making direct payments with a service like Square Wallet or PayPal. That number is expected to climb to 384 million people by 2015 [source:Deloitte]. IE Market Research predicts the mobile payment industry to total $998 billion in revenue by 2016 [source: Nicole].

If you are ready to join the wallet-less revolution, keep reading to learn how Square can turn your smartphone or tablet into a portable cash register, and how you can send as much as $2,500 to a friend using nothing more than your e-mail.