Hip to be square : disruption in the U.S. mobile payment market - Case Study Example

As a result Dorey, still a chairman at Twitter’s Board of Directors started to think overtime on a simplified form of credit cards that was easier and easily adaptable to to low volume merchants without paying exorbitant prices being charged by big credit card institutions in operation such as PayPal. The Square concept initiated by managing the Square app on a mobile device supporting POS operating system and swiping a credit card through the Square Reader that plugs into the mobile phone’s headphone jack.

A Square user can also physically type the credit card number manually. The distinction between Square and other institutions doing mobile credit card transaction business is the pricing since the pricing model of Square at a flat rate of 2.75% is viewed cheap and favorable. Mr. Dorsey, a former founder of Twitter, did not think that revolutionizing payments would be such a tasking initiative having been involved in one of the major revolutionization of the social media through Twitter. However, when this illustrious individual got into the thick and thin of the messy and deep waters of the mobile payment, reality dawned that social media and mobile payments are two unrelated phenomena with very distinct problems.

Part of this difference can be contributed to the fact that the US payment system has been in existence long before the social media come into the fray. To start with, it is of paramount importance to give tremendous respect and credit to Square for managing to open the door and bring solutions to an extremely indulging payment problems for a particular faction of merchants. However, having noted so, the realization that with every solution created, numerous unresolved problems tugs along sets in at Square (Meagher, Malkani, and Tseng 8).

To start with, one of the biggest problems that are easily noticeable is its limited areas and sections from where it can generate significant profits. The reason for this is the fact that a significant