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.

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.

Taking a walk down to Union Square

I had to take a trip down to Union Square yesterday which means this should officially be the next post for the 49 mile scenic trip around San Francisco, but it’s going to encompass a little bit more. When you get off the metro at Powell Street station and return to the land of living you’re confronted with something much different than your quiet little neighborhood where you started…PEOPLE!

More accurately defined as members of the species, Homo touristus, or Tourists. You can tell them from their glazed over look trying to take in everything around them and understand how you can have a really crappy tourist shop next to a very high end fashion outlet or they’re just filling up the space to try and get a ride on our famous cable cars which have their turnaround at the end of their line at Powell and Market. If you’ve never seen a cable car turnaround it’s kind of impressive. The cable car drives onto a large turntable and unhooks from the underground cable. Then two guys literally turn it around so it can head outbound with all the passengers on the new track.

The people who work in and around this area you can tell because their the one’s who are darting through the zombie tourists much like a quarterback doing an end run. When you get to a stop light you more collect into a denser crowd until the light changes and you have to navigate through the horde coming at you from the opposite direction.

Finally after a few blocks you hit Union Square where everything opens up, sort of. I was there around lunch time so it was expected to be crowded. It was the first warm summery day that we’ve had in awhile so there were plenty of short skirts out enjoying the weather with in term brought out more guys to ogle them hoping for a quick breeze to give the skirts some lift. There was a band playing, since it was lunch time which attracted even more people, but at least you had some room to breathe.

This made me wonder how Union Square came to be so I did a little research. It turns out that it was set aside in 1850 by the first American Mayor of San Francisco, John Geary to hold pro-Union rallies. Not the unions you’re thinking of but the pre-Civil war Union vs. Confederates. In 1903 a pillar dedicated to Admiral Dewey’s victory at the Battle of Manila Bay was put in place. Then Mayor Willie Brown, closed the square in 2000 for renovation so that it didn’t look like some kind of Russian industrial playground, but more park-like. Reopening in 2002 it became the unofficial heart of San Francisco where you will readily find art shows, free bands and I believe they still have a farmer’s market there, but I couldn’t find any info on it.

The real reason people come to this area is for retail therapy. This is where you come to shop. Since I grew up in the Sunset District we’d usually go to the Stonestown Mall or Serramonte rather than downtown, but my Grandmother always loved going downtown. I think because it made her feel like an upper crust society woman [my Grandmother was the executive secretary for the Women’s City Club, a place where women whose children had left the nest went to drink tea and eat watercress sandwiches until their husband’s came home from work.]

At Union Square you’ll find Macy’s, Tiffany’s, Saks Fifth Avenue and all the other, if you have to ask the price, you can’t afford it type stores intermixed with the Sketchers and Diesel chains for the younger crowd who don’t ask the price, but just ask their parents to pay the bill. Side note, I once actually paid $75 for a Diesel belt that has held up to all the wear and tear over the 10 years I’ve had it, but I won’t be making any purchases like that for at least another 10 years. I do like to window shop at least and you can do that too for free.

You’ll also find all the upper crust hotels here such as the St. Francis with Beefeater dressed doorman, the Grand Hyatt and Four Seasons along with many other pricey, but luxury hotels. What’s a hotel without places to eat? One of the things I never realized before was just how many steak houses and hof brau type restaurants were in the area. You get plenty of food at not too expensive prices and the surrounds are, acceptable, not suit and tie luxury, but you could do a lot worse. The best known of these places is Lefty O’Douls. A place I and many other denizens of San Francisco history have been found here. Let’s just say if you want to save your money, go to Lefty’s. It’s probably the cheapest spot on the square and the best bang for your buck. Lefty’s deserves its own posting so I’ll leave it at that.

If you haven’t been to Union Square you should go to take in a sense of San Francisco. Now I want to go to Lefty’s.



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.

Ghirardelli Square: Chocolaty Goodness

While most people who come to Ghirardelli Square see a collection of shops and restaurants it was originally the home to the Pioneer Woolen Mills before Domenico Ghirardelli purchased it and set up his chocolate making shop. The main focus of the square is the Ghirardelli Chocolate shop that gave the shopping center its name. While the date isn’t properly known, it was sometime in the late 1800’s that Domenico bought and opened up shop in this place.

In the early 1960’s the chocolate making operation moved to San Leandro and there was a chance that the GSQ as they refer to it now would be demolished. Thanks to the hard work of San Francisco Citizens the place was given a makeover adding shops and restaurants and reopened in 1964 with the chocolate shop still intact even if the chocolate wasn’t made there anymore.

For me, I have a fond remembrance of the chocolate shop as a kid because my family started a tradition around Christmas time of driving around the city to see all the big houses that were lit up for Christmas ending the evening with a trip to Ghirardelli’s chocolate shop for a sundae. My favorite was always the Tin Roof which was a basic hot fudge sundae with Spanish peanuts on top.

The businesses have come and gone over the years, but the chocolate shop still remains with the vaguely medieval stone chocolate conche device in the back grinding the warmed roasted cocoa beans, sugar and cocoa butter releasing the volatiles and acids of the chocolate that gives the room its distinct scent that you’ll never forget.

Chocolate snobs connoisseurs will argue over what type of chocolate is the best. Most prefer hand made artisanal chocolate that’s made by impoverished South American’s that are paid a fair trade price for their organic beans. I honestly have no idea where this not quite hand made but not quite fully mass produced chocolate comes from, but it definitely has it’s own taste unlike other chocolates such as Neuhaus or Perugina. It’s not of the chocolate truffle variety. It’s just plain old chocolate. Not much fancy added to it, just milk, dark and now they’ve started adding nuts and a few other things to expand their line up. They don’t tell you the percentage of cacao in each bar it’s just dark or milk and it’s damn good chocolate.

I suppose I should talk about a few things there other than the chocolate shop, but that should really be the main reason for going. More recently the shops have become more food oriented to attract the foodie crowd which in my opinion is a good thing. They have a downstairs indoor shopping mart so to speak that is flanked on the sides by snack places serving upscale versions of common fare such as Pomme Frites and Yap’s Wraps. It’s a good place to stop buy for a nosh, but you have to make a stop by the chocolate shop.

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