Square vies with NFC for mobile payments

Start-up Square is looking to offer consumers and retailers its own unique mobile payments system through revamped versions of its iPhone/iPad app and its Android app.

Set up as a potential alternative to the much-touted but still emerging near-field communication (NFC) technology, Square's system would still let you pay for goods and services using your mobile phone without the need for cash or a credit card. But instead of having you tap your phone against an NFC-enabled register or terminal, Square's system would let "check into" a store through your phone, pick up your items, and pay for them through your Square account.

The Square system is clearly just getting off the ground. Scattered throughout such large cities as New York, San Francisco, and Los Angeles, only 50 merchants have so far signed up for the service. There are also some limitations. For the system to work, both the buyer and the retailer have to sign up for Square accounts. And like NFC, Square's system brings up the usual concerns about security in the world of mobile payments.

But Square's CEO Jack Dorsey, who also helped launch Twitter, touts his system as superior to the NFC-based competition.

"A lot of people working in this space are concerned with the parts of transactions -- coupons, receipts, waving your phone around in front of a terminal and wait until you hear a beep," Dorsey told the New York Times. "We think it should be one system."

Consumers would access the Square service through a mobile app called Card Case. Using this app, you can locate nearby stores, restaurants, and other retail outlets that support Square's system. You can even scan the menus of restaurants before you go in.

If you decide to grab lunch at a local restaurant or a cup of coffee at the coffee shop, payment is taken from your Square account, which has already been linked to your credit card. In return, the receipt is then sent to your mobile phone.

Retailers would use the system through a mobile app called Square Register, an update to the company's current Square app.

After setting up their own Square accounts, merchants could accept payment using the new credit card-less system or opt to use the traditional credit card reader. The app would also let them keep track of inventory. With retailers running the new system on a device such as the iPad, Square sees it as something that could potentially replace cash registers.

Right now, Square has revamped and updated its apps for the iPhone and iPad but promises that an Android version of Card Case will be available soon, according to InformationWeek.