I was fascinated the first time a friend demonstrated Square to me. She attached the card reader to the top of her iPhone, swiped a credit card through, and showed me the user interface for the transaction. Amazing.
Any new idea clashes with old thinking. The same thing is happening again with mobile payments. The New York Times again had excellent coverage: Swiping is the Easy Part.
The title is a clever jab at this dilemma. Developing a payment platform is a feat of engineering. However, it pales in comparison to wrestling not one, but six entrenched industries into agreeing how to divide the profits: banks, credit card companies, payment processors, phone carriers, phone manufacturers, and Internet giants. That's not even counting the retailers, and whether they'll adopt the new technology in enough numbers for the project to be feasible.
Watching these large companies squabble as a big tech shift is emerging, there's this odd feeling of déjà vu. We've seen this movie before. It usually ends with a nimble upstart stealing market share from the flat-footed old interests. In music, it was iTunes. In movies, Netflix.
Could Square be the David that beats these Goliaths? As I said in my last blog post, I love my long reads. So I couldn't resisting sharing this book-length Vanity Fair article about Twitter founder Jack Dorsey: Twitter was Act One. Among other things, it covers his big plans for Square.
Curious how America is so late to the mobile payment game. Parts of Europe and Asia are already using their phones with near field communications (NFC). Using your phone to pay at subway turnstiles is pretty common in places like Japan.
Africa is one to watch. They seemed to have skipped landlines and gone straight to mobile phones. To be fair, they send money by using text messages, not NFC. Still, mobile payment is widely used and functioning, compared to America.
Maybe there's a lesson in there. Sometimes the fastest path to innovation is frugality, not billions in capital.