Square’s New Mobile Payment Apps Let You Ring Up A Tab

While the big players in the payments industry haggle over the best way to turn mobile phones into credit cards, Square is doubling down on its payment applications, launching a new feature for its mobile phone app that lets you open a tab with local businesses and an iPad application that lets those businesses take your payments.
CardCase and Square Register launched Monday, as part of the startup’s quest to move people off of paper receipts and point-of-sale terminals toward a more smartphone-friendly purchasing system. Jack Dorsey, Square’s CEO and also the founder of Twitter, said in a press release (PDF) that “cash registers and credit card terminals are relics of an expensive, complicated, and impersonal commercial transaction system,” which a fair amount of people in the mobile and payments industries probably wouldn’t dispute. However, the mobile players (Apple (NSDQ: AAPL), Google (NSDQ: GOOG), Research in Motion) and the payment giants (Visa, Mastercard) are trying to build a system around NFC wireless payments with giant retailers while Square focuses on smaller victories.
Square Register is basically the same concept as Square’s original mobile application, which let anyone accept credit-card payments through an iPhone bearing a swipe dongle. The iPad version has a few extra bells and whistles, however, allowing businesses to list themselves in a directory available to Square users, push coupons and other specials to participating users, and allow customers to ring up tabs that can be connected to bank accounts or credit cards.
And on the user’s end, CardCase lets you amass a set of virtual credit cards within an iPhone application. After making an initial purchase with a credit card the traditional way, businesses that are on board with Square can send a text message to an iPhone with instructions on how to download the app and set up an account with that business.
There are a lot of headlines about the new apps replacing the cash register this morning, which is going to be hard to do should Square not manage to sign up thousands more businesses alongside the 50 or so currently listed as participating companies (about half of which appear to be hipster coffee shops). Still, Dorsey recently announced that the service had processed over $2 million in payments, and the flagship Square credit-card reader is getting a lot of exposure through shelf space at Apple’s U.S. retail stores. Visa is also hedging its bets, putting what it called a “strategic investment” into the company last month.