How Twitter inventor's Square is taking shape
By Chris Nuttall
Serial entrepreneur Jack Dorsey is pointing out the origins of his new start-up, Square, as he stands in the middle of its new office space inside the San Francisco Chronicle building.

It is move-in day in a section of the newspaper's emptying headquarters that now has to be sub-let. The Chronicle, founded in 1865, has seen its staff and circulation shrink by more than a quarter in the past three years as people turn to the internet for their news.

The inventor of Twitter, the micro-blogging service, is aware of the irony of the location – Twitter is a rising internet source of news itself. He points out of the window to his own apartment building 100 yards away.

Square, a payments service, was born there in February in his loft-style living space, he says. Today, its nine workers are moving out and he finally gets his apartment back.

 Mr Dorsey then gestures across the street at the granite, doric columns of the old US Mint building – another kind of payments service, established during the California gold rush. He sees it as an inspirational neighbour.

He appreciates the significance of all three locations in the South of Market (SoMa) district of the city, where start-ups flourish in abundance in apartments, coffee shops and rented office space.

So far, Twitter is the one that has had the biggest success, growing to more than 50m users worldwide.

Twitter's origins can be traced back to the 33-year-old Mr Dorsey's programming work on dispatching couriers, taxis and emergency services via the internet a decade ago. He was fascinated how cities worked. Creating messaging for services that up-dated their status as they moved around the streets helped him to build a picture of what was happening. Enabling ordinary users to broadcast what they were doing in 140 characters or less on Twitter introduced a new public layer to the information.

Now Square is adding to the Dorsey matrix by tracking how users transact. “For me personally, it goes back to three concepts of bringing immediacy, transparency and ap-proachability to industries and to social interactions,” he says.

“We can do a lot with pure communications like Twitter, but payment is another form of communication – a social interaction that we all have daily. The exchange of value is something that we all share,” he says.

Later, at his apartment, we meet artist and Square co-founder Jim Mc-Kelvey, whose inability to sell a piece of his own glass artwork in February because he could not accept a credit card inspired the birth of Square days later. The name comes from “squaring up'' a debt, but the company's logo and dongle device are also square.

“Paying with credit cards is very easy, but receiving payment from them is quite difficult,” says Mr Dorsey. “It usually takes about four weeks to get set up, you have to sign a 42-page contract, go through six layers of middle men and the product experience is just not awesome.”

He gestures disparagingly towards an old adding-machine style terminal in a corner of the apartment that was formerly used for punching in numbers and getting paper receipts.

Then he produces his iPhone for a demonstration of Square, attaching a square white dongle to the headphone socket and swiping a credit card through it. The card's details appear on screen in the Square iPhone app, where he adds a note on what he is selling and can take a picture of the product or the buyer, who can sign on the touchscreen phone with a finger.

How Twitter inventor's Square is taking shape

The buyer receives an instant e-mailed receipt showing time and price details, a picture of the seller's premises or logo, a map of the location where the transaction took place and, perhaps, a notification that because this is the 10th cup of coffee bought there, the next one is free.

The seller can go to the Square website, manage all transactions and see the credit card fees. The initial sign-up by the selleris as simple as providing a name, picture, e-mail ad-dress and bank details to receive money. Buyers can also register.

Mr Dorsey says a full working proto-type for the system was built rapidly in February and relationships have been established with payment processors and banks so that Square can act as an intermediary, similar to the PayPal payment service.

The idea of the phone as a mobile wallet has been around for years, but Square says it does not rely on heavy infrastructure or complex technology.

 The self-powered swiper dongle works in any standard 3.5mm headphone/microphone jack and will probably be free. “People feel this is a more human, tangible way to pay. Compared to a black box, it feels like more a part of you,” says Mr Dorsey.

Gaining the initial trust of buyers and sellers might be a problem, he ad-mits, but aspects such as the swiper dongle, immediate receipts, a