updated 05:15 pm EDT, Wed April 27, 2011
Visa invests in Square to spur mobile payments
Visa in a symbolic step said it had invested in Square. The undisclosed amount will be accompanied by a Visa executive sitting on the company's advisory board. Visa representative Ryan Donovan explained the decision to the New York Times as a way of spurring credit card use by getting it to businesses that wanted to, but couldn't, take payments due to the location or cost.
An executive from JPMorgan, which helps handle the financial side of transactions, is also coming to Square's board.
The agreement followed just days after Square brought its payment reader to Apple retail stores and helped reinforce the company's increasing claims to being an established, mainstream payment system. Square was founded by Twitter co-founder Jack Dorsey as an alternative to traditional systems that aren't mobile, can rarely tap the Internet, and which usually cost more to run. The service has been considered a 'halo' feature for the iPad and iPhone at work and more recently came to Android phones.
Support from JPMorgan and Visa could be considered a symbolic slap to VeriFone. The payment veteran tried to propagate a scare campaign by claiming that Square was inherently too insecure. It went so far as to contact JPMorgan, Visa, and other financial institutions with the implied hope they would block Square and put it out of competition. The new backing suggests none of the companies believed the accusations were significant enough to outweigh Square's effect on the industry.