The mobile, and peer-to-peer payment industries are becoming highly competitive. Led by PayPal, Venmo and Google Wallet, these services allow people to send money easily, either to merchants or to friends. Now the credit card processing company, Square, is trying its hand at simplified money transfers that allow users to send people money simply by sending an email. As reported by techcrunch.com:
“Here’s how it works. The sender simply emails the person they want to send the money to with the amount of money either in the subject or body of the email and CC’s [email protected]. If the sender has not already added his or her debit card, then Square will instruct the sender to register a debit card on a web page with just the card number, billing ZIP code and the expiration date. The recipient will immediately get another email from Square telling them that they have received money from the sender with a link to add the recipient’s debit card, billing ZIP and expiration date.
“Once they type in their debit card information, this begins the transfer, which takes one to two business days. We’re told that the recipient has up to 14 days to enter the debit card and receive the money, and the recipient will get reminders every other day via email.”
Square, which was started by Twitter co-founder Jack Dorsey, has already been widely successful with the square card reader for merchants and square wallet for consumers. Now the California company is looking to tackle money transfers. And they may be on to something. With no extra application to download, and user-friendly technology, Square could dominate this market extremely fast. The only barrier they face is trust. According to venturebeat.com:
“While it’s shockingly simple, Square Cash’s ease-of-use could also be a turn-off for mainstream users who aren’t as familiar with the company’s brand. E-mail isn’t typically recognized as a secure medium, and while Square claims it has systems in place to prevent spoofing (according to an interview with The Verge), it will likely be tough for users to accept sending money through the same e-mail account where they receive thousands of spam messages every week. Square Cash requires a new level of faith that average users will have to accept.”
Although trust will be a large factor, customers often choose easy-to-use products over security, just ask Blackberry. Time will tell if the same trust will crossover to users’ bank accounts.
