Finextra Reports that Jack Dorsey's Square is back to...Square One?
Square roll-out delayed over security concerns
Much-hyped payments start-up Square has been forced to delay shipping its product that turns mobile phones into payment card readers because of emerging fraud concerns, with founder Jack Dorsey admitting parts were released "before they were fully baked".
Unveiling his new firm to much fanfare in December, Twitter founder Dorsey predicted Square would be available for customers in the US early this year.
Now, in a letter to customers (see below), he admits "we've let our excitement get the best of us" and says "we realize the amount of time we've taken to ship our Square readers has been frustrating, sometimes confusing, and has generated a number of questions". The start-up initially suffered from hardware shortages but says this has been resolved with manufacturers in China.
However, a new problem has emerged. According to a letter to users from the Square support team: "We need to strengthen our underwriting infrastructure so that we can handle the huge demand for readers and still manage the risk of chargebacks and fraud."
Dorsey says Square initially moved to negate the risks by setting transaction limits but these have been set too low according to customers, prompting "rethinking and expanding" of the underwriting infrastructure.
The letter provides no details on when the product may be ready to ship, with Dorsey signing off: "We thank you for your continued patience as we work to deliver a utility you can use every day and for allowing us the time to get it right."
Finextra verdict: Reality bites for Square. Overly-hyped by the starry-eyed Silicon Valley tech press, Jack Dorsey and Co are discovering the hard way that payments processing is not as easy or as simple as it might first appear. Innovation has its place, but in the money-changing business it has to be backed up by a resilient infrastructure and water-tight contracts. There's no place for a fail-whale in the payments sphere.
Much-hyped payments start-up Square has been forced to delay shipping its product that turns mobile phones into payment card readers because of emerging fraud concerns, with founder Jack Dorsey admitting parts were released "before they were fully baked".
Unveiling his new firm to much fanfare in December, Twitter founder Dorsey predicted Square would be available for customers in the US early this year.
Now, in a letter to customers (see below), he admits "we've let our excitement get the best of us" and says "we realize the amount of time we've taken to ship our Square readers has been frustrating, sometimes confusing, and has generated a number of questions". The start-up initially suffered from hardware shortages but says this has been resolved with manufacturers in China.
However, a new problem has emerged. According to a letter to users from the Square support team: "We need to strengthen our underwriting infrastructure so that we can handle the huge demand for readers and still manage the risk of chargebacks and fraud."
Dorsey says Square initially moved to negate the risks by setting transaction limits but these have been set too low according to customers, prompting "rethinking and expanding" of the underwriting infrastructure.
The letter provides no details on when the product may be ready to ship, with Dorsey signing off: "We thank you for your continued patience as we work to deliver a utility you can use every day and for allowing us the time to get it right."
Finextra verdict: Reality bites for Square. Overly-hyped by the starry-eyed Silicon Valley tech press, Jack Dorsey and Co are discovering the hard way that payments processing is not as easy or as simple as it might first appear. Innovation has its place, but in the money-changing business it has to be backed up by a resilient infrastructure and water-tight contracts. There's no place for a fail-whale in the payments sphere.
PINDebit Blog Verdict: In addition to providing secure "card present" magstripe transactions our SLIM POS has a built-in PCI 2.1 Certified PIN Pad for ultra-secure Genuine DUKPT End-to-End-Encryption, thus PIN Debit rates.
 |
| Conduct Secure End-to-End-Encrypted PIN Debit Transactions with our SLIM PCI Certified PIN Entry Device |
"Dear Square user,
We announced Square with the phrase: "0 to $60 in under 10 seconds."
Square's goal is to enable people to accept payments immediately, everywhere. We realize the amount of time we've taken to ship our Square readers has been frustrating, sometimes confusing, and has generated a number of questions. When we announced the company last December, we estimated Square would be ready in the U.S. sometime in early 2010. Since then, we've let our excitement get the best of us and have released parts of Square before they were fully baked.
A recent email from our support team to a Square user sums up where we are:
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 problem has transitioned to something we've been working on simultaneously, a credit processing and risk issue. We need to strengthen our underwriting infrastructure so that we can handle the huge demand for readers and still manage 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 way we are handling the risk of chargebacks and fraud is through transaction limits, but we have received feedback that those limits are too low. We are rethinking and expanding our underwriting infrastructure to address this issue. As soon as we finish, we will send you an email to confirm that you would like us to run a credit check (or you can cancel your request to process cards with Square which will securely remove your personal information). We will then ship your free card reader and activate your account to accept card payments.
We thank you for your continued patience as we work to deliver a utility you can use every day and for allowing us the time to get it right.
Jack Dorsey
Square CEO"
We announced Square with the phrase: "0 to $60 in under 10 seconds."
Square's goal is to enable people to accept payments immediately, everywhere. We realize the amount of time we've taken to ship our Square readers has been frustrating, sometimes confusing, and has generated a number of questions. When we announced the company last December, we estimated Square would be ready in the U.S. sometime in early 2010. Since then, we've let our excitement get the best of us and have released parts of Square before they were fully baked.
A recent email from our support team to a Square user sums up where we are:
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 problem has transitioned to something we've been working on simultaneously, a credit processing and risk issue. We need to strengthen our underwriting infrastructure so that we can handle the huge demand for readers and still manage 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 way we are handling the risk of chargebacks and fraud is through transaction limits, but we have received feedback that those limits are too low. We are rethinking and expanding our underwriting infrastructure to address this issue. As soon as we finish, we will send you an email to confirm that you would like us to run a credit check (or you can cancel your request to process cards with Square which will securely remove your personal information). We will then ship your free card reader and activate your account to accept card payments.
We thank you for your continued patience as we work to deliver a utility you can use every day and for allowing us the time to get it right.
Jack Dorsey
Square CEO"
Read more: http://pindebit.blogspot.com/2010/06/jack-dorseys-square-roll-out-delayed.html#ixzz0rV8aAhKb
