There is a little revolution that is going on in the payment world at the moment. Did you know about it? First off, square is a start-up from Jack Dorsey (person behind Twitter) that promises to make the life of small business owners easier when it comes to accepting payments. It has manufactured a relatively cheap magnetic smart reader in the form of a, you guessed it, square! That little gadget can easily be plugged into a phone or a Pad and away you go accepting payments. No more bulky clunkers at the cash! I really like the form factor and the elegance of this solution. It will be nice to see how this newcomer grows in the next few years. Intuit has also been touting their GoPayment product. It is essentially the same thing, a magnetic strip reader that snaps to your iPhone. OK, it’s not a square it’s, well, as plain as strip readers get, but it does get the job done! Square and GoPayment differentiate their offering in the way they charge for the transaction and the unit.
Both of these technologies offer the same thing, essentially getting paid fast, preferably, after the job is done. Having worked a bit with hardware based cryptographic engines; I wonder how these two gizmos will manage security and prevent man in the middle attacks?
The next interesting one is a company by the name of Dynamics. They have managed to design a programmable magnetic card. They show an online video demo here. I find the way they have solved the issue of bringing the magnetic strip to the 21st century very appealing. A few years ago during the .com era my buddies and I had grandiose aspirations. The idea was that we would invent a programmable plastic card that would work with a chip (aka smart card) where multiple accounts could be stored in the chip. Sadly, we were unable to bring this idea to fruition, but, I really like how Dynamic has decided to tackle the problem. Having said that, will you be able to have multiple accounts in the same card? Probably. How about multiple accounts from different banks? Fat chance of that happening! Banks, use card as ‘portable mobile brands’ carried around by you free of charge.
The overwhelming advantage of Dynamics is that it makes use of all of the current and well established technologies like Point Of Sale (POS) and server attached hardware encryption boxes in use today. You don’t know it, but every time you withdraw money from a bank or pay something with a credit card or make use of a POS system, those technologies are used to secure the complete transaction. Believe or not, there are reasons why banks are relatively slow at deploying new payment concepts, they can be expensive to rollout and worst of all, one major hack and your reputation is out to lunch. Granted, bank’s reputations have taken a beating in the last couple of years, but would you open an account with a bank that has been hacked?
Having said that, I am not against the principle of bringing new thoughts and elegance to payments just add a hardware encryption at the POS, and secure the entire transaction and you got my vote.
Samy “TheBenz” Benzekry