Anointed the next Steve Jobs by some admirers, Twitter inventor and Square CEO Jack Dorsey is one of the few people who can get the Silicon Valley press corps to roll out of bed early to hear what he has to say. Unlike Jobs, Dorsey spoke from a table at Blue Bottle Coffee near Square's San Francisco headquarters, not the stage of the convention center down the street. Also unlike Jobs, he didn't announce a product that at first glance seemed ready to detonate our digital lives and rearrange the pieces in a fundamentally new way.
Instead, Dorsey unveiled a cash register stand.
Which, as banal as that sounds, turns out to be kind of a big deal. Certainly it's the most elegant cash register stand ever made (though I'm also partial to the wooden, Dorsey-commissioned IntraStand). The Square Stand cradles an iPad running Square's register app. A credit card reader is built into the base. The stand can also connect to a receipt printer and a cash drawer. Based on appearances and apparent usability, it's the coolest cash register available. And at $299 off the shelf, it's a seemingly dead-simple, far cheaper out-of-the-box way for a small business to start taking payments—just add internet.
More importantly, the Square Stand reflects Dorsey's fixation on reinventing technologies most of us consider mundane. In Dorsey's Apple-esque design philosophy, the best technology is technology that gets out of the way, that becomes so commonplace that it drops beneath our notice–think electrical sockets and traffic lights. The more transparently usable a technology is, the more it disappears into its use rather than taking up space as an object of attention itself – the better the design.
"It works so well you never have to think about it working," Dorsey said of the Square Stand at the launch. Steve Jobs couldn't have said it better himself—or probably have invented a better cash register stand.
And yet: It's a cash register stand. I recently wrote that encountering iPads as cash registers would soon no longer be novel. A market research firm had found that the use of "mobile point-of-sale terminals" was expanding rapidly. As lovely as the Square Stand may be, the macro-trend of technologies like Square replacing conventional cash registers has become more interesting than the incremental steps along the way as that technology percolates into the culture. Square's introduction of its mobile card reader in 2010 felt like a compelling new moment in gadgetry—now anyone with an iPhone could get paid by credit card! Since then, however, card readers have become a commodity technology. Competitors crowd the "take credit cards with your smartphone" market, not to mention the "cash register stand for iPads" market. The same day Square announced its latest register replacement, both PayPal and Groupon did the same (though their iPad stands don't look as good as Square's). After just a few short years, the industry has become a horse race. And the next big story won't be hardware. It will be who signs up McDonald's or Target or Whole Foods.
Beneath the checkout counter, however, down in the tubes that contain the ancient electronic infrastructure of the global financial system, the sap is rising.
At last year's Wired Business Conference, Netscape founder Marc Andreessen lamented that web browsers should have offered a way to transfer money over the internet from the start. But he said banks and credit card companies wouldn't go along with the idea. Instead, the worldwide network for processing financial transactions remains essentially walled off from the internet.
And yet that payment network provides a kind of connectivity that the internet can't match, says Eckart Walther, founder and CEO of CardSpring, as well as a one-time product lead at Netscape. Walther describes his company's technology as an API for credit and debit cards—a way for developers to easily access the "dark network" across which payment data runs.
The implication of this access is a little tricky to grasp at first. Walther says to think back to when cell phone apps were all essentially added features offered by cell phone carriers, from texting to voicemail to watching The Daily Show on your RAZR. Most credit card "apps" such as frequent flyer miles programs currently work in much the same way, he says, except the "carrier" is the bank issuing the card. Walther says CardSpring gives developers the necessary tools to build services for credit cards the same way they'd build apps for smartphones--no involvement of the bank (the "carrier") needed. As a result, a massive but also massively fragmented global digital infrastructure gains a new, newly democratized app layer.
The idea for the company was animated by a simple question, Walther says.
"What credit card would Larry Page want? Well, a programmable credit card, of course," he says. "What if we built something where anybody in essence could add a service to a credit card?"
One of the first prominent examples of such an app is available on Foursquare. If you provide your credit card number, checking in at certain stores will get a coupon "attached" to your credit card that's applied directly when the card is swiped at the register. Stores could also use a credit card "app" in lieu of a separate loyalty or club card like the kind you use at the grocery store. Opt in and your credit card becomes your unique identifier to that retailer, online or offline.
In the process, he says the distinction between running an offline and an online business starts to disappear for merchants. A credit card acting as a customer's unique identifier lets offline stores track and analyze individual shoppers' behavior over time just as online stores do. In the U.S., where nearly 95 percent of retail transactions still take place offline, that's a huge amount of data for merchants to mine.
"Payments are really the only online connection into every retail store that matters," Walther says. "Point-of-sale is becoming the online store for the offline world."
Square itself understands this point, Walther says. Square's register app acts essentially like an online store, except payment and delivery take place in person.
And while a shiny new piece of hardware can get reporters out of bed, it's the behind-the-scenes analytics that Square offers merchants that have the potential to drive lasting changes in how businesses run themselves. Dorsey may prize technology that becomes invisible. By dragging the esoteric infrastructure of payments out of the shadows, both he and Walther are also seeking to exploit the great power that seems likely to come from making the invisible accessible.
