Square Payment System Beset With Delays

Square, the super-cool payment system that lets you collect peoples' credit card dollars on your smart phone, is delayed indefinitely while the company tightens various infrastructural screws. CEO Jack Dorsey admits they rolled features out "before they were fully baked."

In an email to users, Dorsey said that the company is delaying shipments of the Square dongles while the company refines aspects of their credit processing infrastructure. Finding the balance between convenient personal credit card payments and secure personal credit card payments is a tricky one, no doubt, and Dorsey admits that they might've jumped the gun a bit before making sure their system was risk- and fraud-free.

Here's the email:

Dear Square user,

We announced Square with the phrase: "0 to $US60 in under 10 seconds."

Square's goal is to enable people to accept payments immediately, everywhere. We realise the amount of time we've taken to ship our Square readers has been frustrating, sometimes confusing, and has generated a number of questions. When we announced the company last December, we estimated Square would be ready in the U.S. sometime in early 2010. Since then, we've let our excitement get the best of us and have released parts of Square before they were fully baked.

A recent email from our support team to a Square user sums up where we are:

Until recently, we were facing a big hardware shortage, but that is now resolved (we sent our co-founder Jim to China for a couple weeks to arrange better manufacturing, and that did the trick). The problem has transitioned to something we've been working on simultaneously, a credit processing and risk issue. We need to strengthen our underwriting infrastructure so that we can handle the huge demand for readers and still manage the risk of chargebacks and fraud. This is the last thing preventing us from shipping readers as fast as we'd like, and we have pretty much the entire team working on it.

The way we are handling the risk of chargebacks and fraud is through transaction limits, but we have received feedback that those limits are too low. We are rethinking and expanding our underwriting infrastructure to address this issue. As soon as we finish, we will send you an email to confirm that you would like us to run a credit check (or you can cancel your request to process cards with Square which will securely remove your personal information). We will then ship your free card reader and activate your account to accept card payments.

We thank you for your continued patience as we work to deliver a utility you can use every day and for allowing us the time to get it right.

Jack Dorsey

Square CEO

It's good that they're squaring up to these issues rather than sweeping them under the rug. I've used Square a few times recently and it is pretty amazing to see it in action—it's a great idea and and a well-executed one, but "better safe than sorry" certainly applies here. [TechCrunch]

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