Square was launched today. I whipped out a quick diagram (in Dia) of how it might work since it’s not apparent from the website. Correct me if I’m wrong.
This design provides a simple, extensible solution. The key module here is the card reader which plugs in to any device with an audio jack. At present, of course, only the iPhone/iPod touch feature the Square Up application. I am pretty sure it will soon be available for a plethora of smartphones out there.
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