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The New Way To Pay Just Got Interesting

SquareThe tech edge that San Francisco holds currently has people jumping with joy or frustration. There are new things developing that could be wonderful or that could screw who the status quo of how we live. I had an interesting experience last week that I’m going to share with you.

Now you’ve heard me talk about San Francisco based Square as being a good ecommerce company. They don’t charge you anything up front. They send you a credit card reader for free and their software for the iPhone and Android is also free. The company even sends you business cards to pass out to get people to understand how Square works and they charge you only 2.75% per transaction with no transaction fee.

To put this in perspective a bit, Wife and I used to own a home based business. We had clients all over the country so credit cards were necessary for use to take. We were charged $800 for the software, then $35/month plus 35¢ per transaction fee, plus 3.5% on every transaction. We didn’t have a lot of business and our corporate clients worked off of invoices so if we only had one sale of $100 in a month it would cost us $38.85 just to get that $100 [or I would only get $61.15 out of every $100 sold]. With Square it would cost us only $2.75. If I didn’t have the credit card handy Square would charge me 3.5% of the total or $3.50 out of $100. Still a deal.

Looking through the app last week I noticed a large increase in the number of small businesses who were using Square and after downloading the new update it’s even easier to run on my iPhone since I can put in the individual items and they now show up on my iPhone, not just on the iPad.

I aslo received a phone call last week from someone at PayPal who was trying to sell me on PayPal‘s new PayPal Here service. I was kind of surprised as the phone number they called me on was linked to an old account I had made a mistake on. I had used it for donations for a website I used to run and as a joke I listed a donation as something that it turns out PayPal doesn’t want you to sell. It doesn’t matter whether or not there are large companies selling the same product I wasn’t, but I apparently broke their rules so I was banned for life from ever using PayPal again.

The guy on the phone told me it works, just like Square, but is cheaper. Well it’s only 2.7% vs. 2.75% and I’m not big enough that I’m going to complain over losing 50¢ on $100. PayPal is so much like Square that they made their card reader look like a triangle to keep with the geometric primitives angle. I told the guy that it was nice of him to offer this to me, but I had been banned for life from ever using PayPal again so I would have to pass.

Now when you are told that you are banned for life from using PayPal ever again you would think that this would mean that you just couldn’t use it to accept money. Well, you’re wrong. I had tried using PayPal in the past to purchase things from small companies on the internet and discovered that my bank account that was tied into PayPal‘s system was also banned from buying stuff from PayPal online. I happened to meet up with a friend I was telling this story to and he had the PayPal Here service so I told him I’d give him a buck if he let me try something. He pulled out his phone and plugged in the reader and I entered $1 and swiped my card. Guess what? My card was declined even though I had well more than $1 in my account. Why? Because I have been banned for life from ever using PayPal for anything [which they don’t tell you]. I would have to open a new bank account to get it hooked up with PayPal so that I could use the system. I don’t want to be bothered with that and I was told that if PayPal identified me as the same person that I would be banned again. It doesn’t matter if they really hire people to search for previously banned users of PayPal who want to be able to use it to pay for items. It’s fare too draconian an attitude for me to want to deal with.

Jack Dorsey, the founder of Twitter who started Square is a genius in my opinion. While they do have a few areas they don’t like to venture into sales wise they are pretty much an ecommerce company first that wants to make taking money from people for goods and services more affordable. If you’re a tech geek you can pull out your smart phone and run their Square Wallet app place your order while in line and just pick up your stuff at the counter or if you’re one of those people who doesn’t like this new technology because in my day they didn’t have smart phones and you had to tie two soup cans together with twine to call someone, you can use a regular old credit card. This is something that gives small businesses the edge. In looking around the USA I see that most metropolitan areas have quite a few places that accept Square. Not as many places as in the San Francisco Bay Area, but still a good amount. I can see this taking off in the near future even bigger and Square has a very big edge over PayPal in that it doesn’t shut out potential users from the system. PayPal has messed up big and if you do a quick search in google you’ll find lots of people complaining about being banned for life from PayPal. Square is the future and the way to go for small businesses.

Fun With FourSquare

foursquare-logo-iphoneI decided to have a little fun this weekend with one of San Francisco’s tech companies, FourSquare. The family decided to take a run out to In-N-Out burger in Daly City and as usual, daughter and I sat in the car while wife scoped out the place to put our order in and see if there was a table available. I had some time on my hands, so I pulled out my iPhone and started tapping away.

I pulled up FourSquare to allow me to check into In-N-Out burger. I’m not really sure why I do this. I don’t get anything for it and FourSquare gets lots of data from me and everyone else who uses it just to give me a badge-like picture for checking in at a lot of places. I at least got an Apple TV from Viggle, so today it was time to have fun with them.

As I was checking in I noticed the picture icon where you could take a picture of the place you’re checking into which gets added to the list of pictures for that particular place. I happened to notice something really fun. It was so fun that I had to make the Dr. Evil face. It gave me a choice to add a picture from my library. Oh dear, what have they done now. So I can add a picture of anything I want to the place I’m checking into. Me being the rebellious type decided to choose a picture of a taco that I had on my camera. I know. It’s not the most rebellious thing to do, but it was a start.

I could see something that was at our disposal where you could make a statement with your check in. You could get a picture of drunk fails and post that to a bar you frequent. A herd of cows would be appropriate for a check-in at Costco. Come to think of it a herd of cows would be fun to post at a gym. PETA [People for the Edible Ethical Treatment of Animals] would have a field day posting pics of slaughterhouses at meat friendly places. I posted a picture of my old roomate’s dog Bear licking her lips with a beer in front of her looking like she’s about ready to pass out to my check-in at Krispy Kreme doughnuts because when you look like that what kind of food sounds really good.

These are places that I like. Imagine what I could do if I was given bad service at a place I checked in to? Pictures are worth a thousand words and I think there are many ways that FourSquare can now beat out Yelp.

Food Trucks Then and Now

Food TrucksSan Francisco has been over run with food truck culture just like many other cities. This time the food trucks are different than they used to be. When I was younger [not a kid, but this lasted into my early thirties] there weren’t really any food trucks other than the taco trucks you would see usually of the El Tonayense variety. These early food trucks were real working man’s kind of places to grab a bite to eat. Now the food trucks have slicked themselves up to cater to the foodistas around San Francisco.

The taco trucks were great when you were on a budget because I could get a burrito I could never finish and a coke for about $4.50. Now the food trucks are pushing up their prices selling gourmet, artisanal and organic foods to the foodistas who have lots of extra cash and in many cases don’t realize that they’re eating the food that the working middle class eats for around four times the price.

I have seen the trucks all over the city and I find it hard to pay $6-$8 for some variation of a grilled cheese sandwich plus the soda is separate from that price. My wife and I were watching The Great Food Truck Race where one truck was selling their hamburgers for $10 and lost due to lack of income and afterwards they were talking that they could have stayed in the game if they charged $12 per burger. I don’t know about you, but I can grill up a might fine hamburger at home with a side of fries and a coke for about $2. I also know of many foodista sit down places where for my $12 I get to have a seat at a nice table and I get the fries and coke for my $12.

I have this little hand gesture I make where I hold my hands flat in front of me to represent the amount I’d have to pay to purchase what they’re selling at cheaper price. Let’s say I pay $10 for lunch for two at In-N-Out burger. Now if I go to a food truck the same thing would cost me closer to $30, so I raise one hand up to show the price difference and ask, for 3x the price is it 3x as good? Honestly, I can’t and don’t think many people can taste organic, artisanal or gourmet in most cases. I can taste a well made hamburger, but gourmet and artisanal are words that are just used for packaging in my mind.  I hand made some silver dollar pancakes for my daughter because I thought it was cheaper than buying the pre-made ones for her. Mine ended up being tossed aside for the mass produced perfectly round pancakes. Oh well, at least I and my friends and family know I’m a good cook.

I understand the whole idea of the experience of eating at a food truck gathering. Off the Grid is a great example of pulling in people who have a large choice of food to choose from. It strikes me though as kind of like a food court that’s outdoors though. I’ve eaten food from several of the food trucks, but while they were good in most cases I’ve been able to get just as good from other places that are cheaper where I can sit down inside.

I don’t think San Francisco is the best place for food trucks because we don’t have the weather to support them every day unlike say, San Diego where the weather forecast is always, nice. We’re an expensive city to live in and the costs get passed on to the people. If anyone disagrees with me please post a comment because I wouldn’t mind being proven wrong. I’d like to see what I’m missing here. Please note that I haven’t mentioned anyone by name as I don’t want to upset any of the food truck owners, yet I do find it interesting that when I visit their websites they never list prices. Most restaurants do list prices and I just think the old rule of, if you have to ask the price you can’t afford it shouldn’t apply to a truck were I have to sit outside in a windy area to eat my food that’s gotten cold half way through it.

Triangle vs. Square

So I’m sure you all know by now that I hate PayPal, I hate them a lot. Yesterday they unveiled their new product for mobile merchants: Triangle umm PayPal Here. I’m not buying into it for a number of reasons and yes, I’m about to pretty much tell you all of them.

First thing that was kind of funny to me was that they’re undercutting Square by .05%. What that means is that if you charge someone $100 you’ll be giving Square 5¢ more of your money. 5¢ out of $100 isn’t going to hurt me too much.

Second, the PayPal app looks like it was a complete reverse engineer of the Square app. The only difference between the two is that you have to enter the CVV number after swiping the card which you don’t have to do with Square.

People are talking about the 2.7% fee vs. the 2.75% fee of Square and then following it up with, but you get a free debit card that any money you charge someone is immediately available on the card which gives you 1% cash back making the effective rate 1.7%. While I’m good at math I’m not so good at bait and switch economics and something just didn’t sit right with me on this one until I saw a comment made by someone using the name SounderJunkie on The Verge that said:

Umm, the 2.7% is charged to the merchant, the 1% cash back goes to the customer using the card. The only way this becomes an effective rate of 1.7% is if you are charging your own card. Interestingly, this is classified under US law as money laundering.

Money laundering? Interesting idea. So they give you a debit card that accumulates your charges without the need for a bank account. As a freelancer I’ve run into times where I have to prove to a company that I was employed by showing them bank statements verifying PayPal or Square deposits to my bank. From what they’ve said so far they won’t be issuing bank statements for you and I can only suppose that they will show up on your PayPal account which looks more and more like a bank statement every time I have to look at one and at one time in the past they were acting like a bank encouraging you to keep your money in your PayPal account and earning interest on it through their Market Rate program or spend it with your PayPal debit card [something that when they got that started years ago I applied for, but never got.]

Third, PayPal is an established online payment juggernaut. They are virtually the only form of online payment that online businesses will accept. I just happened to check their site and noticed that they’re previous fee of 2.5% + 15¢ transaction fee has now been raised to 2.9% + 30¢ transaction fee. So in order to offset the extra .05% they’re giving you to undercut Square they now have to raise their rates for normal online PayPal exchanges unless you can get approved as a non-profit or make more than $3000/month. They also have some policies that are a very draconian in nature. They’re already telling book sellers that if they want to sell ebooks and accept PayPal payments they cannot sell erotica. Yet there is on eBay an ahem Adults only section where you can buy also sorts of erotica as well as some other rather bizarre sexually fueled devices and pay with PayPal and that’s OK because, well eBay owns PayPal and they love their monopoly status.

If you make a mistake and accept a payment for something they they don’t like you to sell [online raffles are a big one that people get hit with] they will suspend your account and hold all funds for 180 days and not even let you refund any payments. At the end of 180 days you can remove the money, but your account while still existing cannot be used because you have been banned for life. As a matter of fact anyone living at your address is also banned for life. If you sell your house and someone moves in that uses your old address they may end up being banned for life as well [in a call to PayPal that one caught them off guard, but they did say it could possibly happen].

 

Now Square, a San Francisco based start up that has been getting rave reviews since it’s beginning has also become pretty well established for mobile payments. Most of the food trucks around the Bay Area use Square. Small coffee shops and bakeries are using it. Sure there are a few other options around, but they usually charge more to process credit cards than Square does and the .05% lower rate for PayPal Here won’t help them overcome PayPal’s hatred by those who have used it in the past. I don’t think Jack Dorsey at Square will be quaking in his boots anytime soon.

If you want to get away from PayPal for online payments that don’t require a card swipe I suggest you check out Venmo. There are no fees associated with it unless you’re making a lot of money through it which in the future they say they will be instating fees for businesses to use it, but keep it free for individuals.

Forgive Me Apple, For I Have Sinned

I try to talk about San Francisco things during the week, but with the release of Apple’s iOS 5 yesterday I learned a few things that Apple doesn’t tell you so I have to give them a smack today.

My wife is not an early adopter. She is still using Tiger just as my workplace is using. I knew iOS 5 was to be released yesterday and was notified yesterday morning that there was an update to iTunes. I figured this was a tie in with iOS 5 since you went through iTunes to update your iOS devices previously. At work, we have a strict IT department so that wasn’t possible, but when I heard the announcement that iOS 5 was finally released I tried to update, but had to wait until I got home.

I get home and plug in the iPhone and try to update and was informed that it was having trouble contacting the update server. So I tried again, and again, and again with no luck. I figured everyone was doing it so that was the problem. I did check the suggestions to get around this and finally checked for new software updates and low and behold there was an update to OSX 10.7.2. After installing that I found out that I could update my iPhone to iOS 5. The only problem is that my wife’s iPad is hooked up with her computer and she is wary of updating because for some reason she always finds something that goes wrong. Well, it turns out that she can’t update to iOS 5 until she upgrades to Lion. Now I also have friends with mac’s that can’t upgrade to Lion because they’re computers don’t meet the specs who also have an iPhone or iPad. They’re out of luck completely.

On the plus side I have to say that both Lion and iOS 5 are nice, but there isn’t much shockingly different at first look. I say this to people who aren’t early adopters that feel like they’re missing out, you’re not really. There are a few new cool things, but nothing majorly WOW. I have noticed a few problems also, well one problem and that’s with the move from MobileMe to iCloud. First when you try to transition to iCloud you’re told to log into me.com to start the transition. This is wrong. You go to iCloud.com and enter your MobileMe user name and password and that is what starts the transition. After I transitioned I’ve found that while iCloud gets the mail it keeps telling me that my password is wrong and I need to re-enter it. This could be from the fact that many people are changing over to iOS 5 that it’s putting a strain on their new server farm. Also as I am typing this for some reason Safari has started to automatically hide itself under 10.7.2.

While I don’t totally understand the #OccupyWallStreet phenomena that’s going on, if you’re not an early adopter of Lion I suggest it’s time to go down to your Apple store and #OccupyApple and make them fix the problem. Yes, I know you need to have Lion installed in order to use iCloud, but if you have a mac that doesn’t meet the specs for Lion and you’ve been using MobileMe as of June next year it will all disappear on you. Which means that in moving forward you’ll have to get a new mac and switch to iCloud to continue to use your mac.com or me.com email address and all the other new features. You will be as useless as a Newton in a short time.

Apps I’ve come to appreciate

Seeing it’s a wild weekend I’ll go off base again. I’ve come across a couple of iOS apps that I’ve found to be very useful to me and a bit of a game changer in many ways. These are two apps one for commerce and one for pleasure that have changed the way I think in many ways.

The first is Square. It is a free app which is always a bonus. When you download the app it pushes you to register to receive a card reader, also for free. The card reader plugs into the headphone jack of your iPhone or iPad and then lets you scan a credit card for payment that is directly deposited to your bank.

Now I remember back to the days when I had a credit card account for a business I was running. I had to pay $35/month plus 35¢ per transaction plus 3.25% for every charge plus there was the charge for the software which was somewhere in the $500 range. This was rather expensive and I didn’t like it. It made me understand why some places were cash only. If you’re a small business or a seasonal business you’re kind of screwed having to shell out money each month for a service you aren’t using that much. Square is different. They don’t charge you anything up front, they give it to you for free. They don’t charge you a monthly fee. They only charge you 2.75% per charge. This comes in handy to me. It’s less of a charge than PayPal which you already know I don’t like. It is a spontaneous way to obtain money. I frequently tutor people and I was at a computer lab one day and when I was finished with the person I was working with I was approached by another person who asked me about my services. When I was finished I pulled out my phone and swiped their credit card to bill them and they were sent an email with my contact info for future business.

Sure, it costs you a little bit, but to me it’s worth it. Overall it costs you less than regular credit card services and that was the point when Square started up. They wanted to reach out to small businesses and entrepreneurs who wanted the ability to charge credit cards on a mobile basis or at the very least wirelessly at a low cost. Now they have taken it a step further. Now small businesses when they charge your card if you have a smartphone it will send you a message asking you to download the app. Once you do it will let you open a tab with the business you’ve visited so that the next time you visit the business you can tap on the tab and it will connect with their device in an encrypted format so that you don’t even need to pull out your credit card. This is the type of NFD [Near Field Device] technology that people are trying to work into the hardware of their phones that now can be worked in with the software.  The iPad version is a bit richer in that you can program in a list of services or offerings so that it acts more like a cash register itemizing a persons order and emailing them the details. I really think that Square will be a game changer in the near future. You’ll see it popping up in numerous places in San Francisco now along with other major metropolitan cities.

The second app is called Flipboard. This is an app aimed at the iPad and it is a really nice app for repurposing content from social networks and news sites into a consistently similar format. You can browse through your facebook, twitter and news sites of your choice in a format that looks like a condensed magazine format. The nice part for twitter and facebook accounts is that if you post links it follows the links and brings in a synopsis of the article and adds it to the link. Tapping on the link takes you to the full article formatted for the app so it always gives you the same familiar look and feel.

I find the biggest thing I like about Flipboard is the facebook and twitter integration. It makes it much easier to follow what people are talking about instead of seeing just text and links. Now you get to see the pictures and videos people post instead of just seeing the text. It is a more visual form of social networking than textual version. Yes, it’s a bit of a pretty toy, but it works. I can fully understand why Apple has it listed as an essential iPad starter app. It also is free.

HearPlanet: Bring the World to your Ears

Last year I started working for a company here in San Francisco that writes apps for the iPhone and Android. Specifically there’s one app that’s their big seller and I’m going to tell you about HearPlanet today. It’s a cool little app that replaces those guidebooks you would need to use when you travel around and it does a very good job of it.

I should know, I did quite a few of the voiceovers for the app in my home studio. It uses GPS location and pops up the places around you and gives you a little background story on the places. Not only is there custom content that we created, but there’s also works drawn from Wikipedia and CitySearch to add to the list so that no matter where you are there’s something to hear. While there’s a large amount of data on San Francisco because the company started here, there are cities served around the world.

If you download the app for your iPhone or Android phone and you happen to be traveling around San Francisco or New York you might hear my voice pop up. [hint, the links are to samples I’ve done.] There are special featured places and they now have it set up so that you can join their site and upload your own content of places you like around the city, or whatever city you’re in.

The app itself costs $4.99 for iPhone [$2.99 for Android], but there is a free lite version of the app that has the banner ads on the screen. It’s well worth the price. Some of the businesses also offer special deals when you look them up in the app.

HearPlanet taught me a lot of things, like how to virtually run a company. We’d all meet up on Mondays or if we couldn’t we’d join in on a Skype conference call to see what our work was going to be for the week, then some of us at least, would go home and do the work. I learned the joys of using dropbox to transfer files that we were working on and how to work in the cloud. This was new to me and it was a really great innovation for a way to work.

I also learned how to better manage CSS and uploading the content to the backend of the system. It was a very cool process to be involved in and now you can be involved to. Everyone loves to tweet reviews of places, now you can actually write up a review of a place and upload a picture and audio. I think this is going to take off very soon. Check it out.

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