The iPhone has made a major step forward to interacting with customers financially, and credit cards have another step towards use in even the most casual of situations.
Square, Inc. has just released an iPhone app / Hardware combination that allows you to read credit cards right on your iPhone. The ability to use your iPhone as a credit card reader has been discussed for years, and now it has been made practical on the consumer level for average users.
The Square credit card app is a free download at the App Store and then requires a registration directly with Square. From here you will pay $9.95 for the card reader, but with the ten dollar credit you get with the registration it ends up being essentially free. Once you recieve the reader in the mail you start by plugging it into your iPhone's headphone slot. When you are running the Square credit card app you can scan the card with the peripheral device, allowing it to come up and be charged through the app. After you have finished with the credit card transation you can easily send the receipt over to your customer through an email. You will link your own bank account to your Square account, allowing payments to go directly to you.
Though the associated device will be for sale at the Apple Store, the cost from this is not where Square is going to make its money. Instead, there is a 2.75% fee for regular "swipes" that allows them to make their money without even applying any outside fees. The assumption here is that the ease of using the Square credit card app will be dramatic enough to create mass use, and therefore positioning Square in a great place.
This major step forward is on par with the creation of Pay Pal, which revolutionized internet purchasing. Instead of being forced into cash for simple transactions, portable businesses, or even things like a home garage sale, you can use the same credit system that a major retailer could. This is going to open up the options for those looking to buy and sell on their own, and could be one more step towards cutting ATMs out of the equation.