Square is a free app that allows a person, business, charity or anyone to accept credit card payments from their iPhone, iPad or iPod Touch. Once you download the app you sign up for a free card reader that attaches to your iDevice through the headphone jack. You then verify a bank account by confirming two small deposits and you are ready to accept payments. The app will add sales tax and email you a receipt with description and photo of item purchased. A newer version will soon allow additional details of the transaction like name, address and additional item or service sold details. While this might seem strange to many people I see this as the future. It benefits any small business that doesn’t accept credit cards. You don’t have to sign a contract and you don’t have to pay for any machine, setup fee or monthly fee. The only costs is 2.75% of the transaction. Not bad! Ever go somewhere like a restaurant and find out they don’t take credit? Yes, there are lots of small businesses that don’t. First watch how easily this works in the video (please rate & comment) and then for why IMO Square is doomed for failure. Square’s founders and investors are impressive. Jack Dorsey (the co-founder of Twitter) founded Square and early investors include Foursquare’s Dennis Crowley and Digg’s Kevin Rose. With such brain power I’m really surprised how terrible an investments this seems. First, it was almost a year ago when I first started reading about Square. Six weeks ago I signed up and applied for a reader. It was only yesterday that it arrived. The reader doesn’t work with an iPhone 4 (unless you put a piece of paper between it) as the metal antenna disrupts the metal strip on the card. Square already has a fix for this, but after waiting so long for a reader to get one that doesn’t work is pretty sad. What’s worse is in the past month Verifone has a launched a similar service partnered with Paypal. This is a technology many people will not be comfortable using. The target market is those already used to online payments. IMO, Verifone’s partnership with Paypal will help them grow much faster. Most importantly, however, metal swipe credit cards are going to die. Most people in Europe already use credit cards that have a digital chip in them. This is safer and where all credit cards will end up in the not too distant future. I would assume Square can adapt to this technology, but for the time being they’ve thrown a ton of money into something destined for failure. Luckily from the list of early investors – they all can afford it.