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Thinner card reader could help Square not 'fail' its users

The new device is 45 percent thinner than the current model, and does away with wires and an internal battery. It should work much better, the company said.

Square's new card reader is 45 percent thinner than its predecessor and does away with internal wires and battery.

Square knows that while its mobile payments system is increasingly popular, if its credit card readers fail, potential customers are less likely to continue using it.

One of the most common failure points for the current reader, which plugs into a smart phone's headphone jack, is its internal complexity: a system of dozens of small parts, including wires, a spring, and more. Today, the company unveiled a new version of the reader that does away with many of those parts and which is designed to significantly reduce the chances of dysfunction.

The new reader was designed from the ground up to be thinner and simpler, explained Square's head of hardware, Jesse Dorogusker. Indeed, it is 45 percent thinner than the current model, largely because it features a magnetic read head that's half the width of its predecessor.

The evolution of Square's readers. Square

The reader also boasts a new, patented system that replaces 30 components, including the wires, with a tiny chip, designed by Square. It also does away with the need for an internal battery, and instead draws power from the mobile device into which it is plugged. But thinner doesn't mean more fragile. "The wires were the biggest source of failure," Dorogusker said. "Instead of trying to figure out how keep the wires from breaking, why not just get rid of the wires?"

Though Dorogusker predicted that the new reader would boost Square's business only incrementally, he also predicted it would lead to happier merchants -- and customers -- and as a result more Square users. Because if "we fail them," users may not return.

Starting today, any merchant who signs up for Square will get the new reader, and by the end of the first quarter of next year, the current model will be completely phased out.