Poised to become the PayPal of the iPhone, Square is a payment service that can process credit cards through it’s app on the phone. Advisers to the new startup include Alyssa Milano (ya, that one – the girl from Who’s the Boss who grew up to be hot) and Square is co-founded by Jim McKelvey, who got the idea after not being able to sell a piece of his glass art because he didn’t have a merchant account to accept credit cards.
In a first round of venture funding, Square pulled in $40 million, according to TechCrunch. $10 million of that from Khosla Ventures, thanks in part to former Facebook CFO Gideon Yu, who joined Khosla in August.
Square is able to process VISA, MasterCard, and American Express through its system and works very much like PayPal, except it’s exclusively for the iPhone and Android (think Verizon Droid) platforms.
Currently, Square is in private beta, but their site has launched as of yesterday and was announced, appropriately enough, on Twitter through Dorsey’s account.
Square markets their website plus a small device that attaches to any iPhone or Droid. Using the device (a credit card reader) and Square’s iPhone app, anyone with a Square account in good standing can swipe a card and process a payment by having the card holder sign the screen receipt. Receipts from Square users who pay through the system are automatically sent via text message and/or email.
A penny from every transaction is donated to charity and Share customers can choose their charity through their account. Processing fees similar to PayPal’s are charged to the money receiver on Share. Other options include tracking customers so that frequent Share payers can be eligible for rewards from the merchant.
Now, it looks like Jim McKelvey can sell his glass art after all.