Could it be? Could there finally be an alternative to PayPal? Square might just have the answer. The same company that brought contractors everywhere a way to accept credit card payments using a smartphone or tablet has just created something called 'Square Cash.'
Square hasn't made any official announcements about the new service yet, but some savvy tech sleuths have discovered the landing page for Square Cash. The page shows an email message from one person to another that includes a dollar amount. Here's how Square Cash might work.
Cash Via Email
Users can send an email to a friend (or service provider) with a dollar amount in the subject line. Inside of the email, users place a specific Square link. Recipients are then asked to click on this link and attach a debit card with the transfer. After hooking up a debit card to the account, the money will be sent. Square will charge a $0.05 fee per transaction to the sender (not to the recipient!) -- that's a heck of a lot cheaper than what PayPal charges!
Right now, Square Cash is in beta testing mode only, which means that you have to be invited to use the system. The whole thing looks promising, though, and it's all ready to roll, it seems. If the beta testing goes according to plan, you might just have a new way to receive and send funds. A way that doesn't involve losing many dollars over every transaction. Getting clients and friends to switch, however, might be a different story.
Some Good Competition
In most cases, competition is always good. This is particularly true when it comes to PayPal competition. A company like Square might provide PayPal with some incentive to lower fees, and that is a positive thing. Right now, PayPal pretty much corners the market. If some heavy competition comes along, PayPal won't be kind of the playground any longer.
Google might be another PayPal and Square competitor. Google has just launched Google Wallet, which will allow Gmail users to send funds via Gmail. This service is already in full swing in the United States, and it looks like Square isn't too far behind. But, how do you convince your friends and clients to actually trust a service like Square or Google Wallet?
Square has gained a pretty solid reputation. A lot of people from local bakers to taxi cab drivers are now using the Square system. Still, some people might be reluctant to use anything other than PayPal. What can you do about these folks? You can try to get them to test out Square. Of course, some senders might not want to pay the fees that PayPal usually charges recipients, so that's something to consider.
Then again, you can also tack on those PayPal fees to your initial service fee, right? Regardless, Square's new service is well on its way. Small business owners will be taking advantage of the new service first, but it should roll out to individuals soon enough.