Home Jack Dorsey: Square Preparing for Credit Risks

Jack Dorsey: Square Preparing for Credit Risks

Ever since the announcement last December that Twitter co-founder Jack Dorsey was launching Square – a platform for accepting credit card payments on mobile devices – a debate has raged on over the security risks the app may or may not create. The application has since launched on the iPhone and iPad, but its use has been hampered because of production delays of its card scanning dongle. Today, however, in an email to users, Dorsey said Square is retooling its infrastructure to handle credit risks and is close to finally shipping more scanners.

“Until recently, we were facing a big hardware shortage, but that is now resolved (we sent our co-founder Jim to China for a couple weeks to arrange better manufacturing, and that did the trick),” the email says, quoting a Square support team member.

It seems the main problem behind the delay now is the ongoing concerns about security, and the risks involved in dealing with large credit transactions. According to the email, Square is making large enhancements to its infrastructure to handle traffic while managing “the risk of chargebacks and fraud.”

“This is the last thing preventing us from shipping readers as fast as we’d like, and we have pretty much the entire team working on it,” the email says.

Dorsey says the infrastructure changes are to counter-act criticism that Square’s transaction limits are too low. He adds the company will notify users soon that it is ready to begin running credit checks and shipping card readers. “We’ve let our excitement get the best of us and have released parts of Square before they were fully baked,” said Dorsey.

Will the launch of additional scanners to more users help Square’s popularity rise? There are plenty of alternatives already available which allow users to accept credit payments on mobile devices, including PayPal and an app called iPay POS, among others. Square seems to be focused on simplicity, but as it has learned, accepting credit payments is anything but simple.

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