We’ve been closely following the buzz surrounding Square, the latest tech startup from Jack Dorsey, Co-Founder and Chairman of Twitter and now it’s live worldwide with its app available on the App Store.

Square is an ingenious app and payment service that allows anyone from a single user to businesses to accept credit card payments anywhere using just an iPhone, iPod touch or iPad. Those who sign up to the free Square service available at Squareup.com will receive a free card reader that plugs into the audio jack of your device and allows for cards to be swiped. Card details can be entered into the app manually if no reader is present. Receipts and photo verification are included with the service so users are sure of secure transactions with signatures signed on the iPhone screen.

In an open letter on the Square website, Jack Dorsey said:
“Square intends to bring immediacy, transparency, and approachability to the financial world. We want to enable all people to accept payments instantly, with access to all the information they need, in a way that feels amazing and engaging.”

This service will come as a great benefit to smaller businesses or mobile vendors who no longer need to put complex payment systems into place to complete transactions on the road or in person. Square is also keen to point out that, while attractive to the business market, the service is ideal for personal use too and uses the example of a man selling a sofa to his friend using his iPhone and Square.

The environmental benefits of the service are also clear with no paper bills or receipts created from any transaction. Square also points out that it can inform businesses of its repeat customers meaning loyalty cards may be a thing of the past.

So what’s the catch for this free service? It seems there really isn’t one. By comparison to other payment services, Square is a very reasonable option with no contracts or monthly minimums. Square takes a small percentage of each transaction, currently 2.75% +15 ¢ with the card present and 3.5% +15¢ when the card number is keyed in. That’s it!

Of course, a service like Square may take a little time to grow but, if it’s as easy to use as is promised and continues to offer the environmental and financial benefits it does currently, we could likely see Square becoming the default payment service in stores around the world.

After all, it’s not like Mr Dorsey’s other company is doing badly right now.

It began with a Disney Store pilot program where staff would ring out customers via an iPod Touch. A system that was so successful Apple rolled the handhelds into all of their retail stores replacing their well weathered Windows CE-based EasyPay system. Recent reports are indicating Apple is even considering opening this up to widespread commercial use. While great for large retail businesses, the EasyPay Touch units are simply too bulky and overpowered to really be useful for all of the small businesses out there.

Thus the Square is born! A company brought to life by Twitter founder Jack Dorsey, has created a adapter for reading “payment cards from any device with an audio input jack, including your mobile phone,” as stated on their website. Still in beta testing, the Square is expected to launch sometime in early 2010. They certainly aren’t the only ones eyeing this highly untapped and potentially very profitable market though.

Morphie, the company which has been mainly focused battery packs for the iPhone, is the newest player to the game and they are certainly going to be steep competition. Released today was information on a Credit Card Reader which will be specifically designed for the iPhone/iPod Touch that will be accompanied by its own specially made app to run it. Details are still sketchy right now with more being promised at CES 2010 but based on the mockups alone its already creating a stir in the community. Make sure to check back early and often next week for our coverage of CES and hopefully more info on this guy.