It's actually very disruptive, that post is missing the point. Yes, for some established businesses, it may not make sense. And they aren't overthrowing credit cards or banks, but that's not their aim. Square is democratizing payments--allowing anyone to be able to accept a credit card payment. Think of the implications of that: any small business owner will be able to accept credit cards, anywhere. Or my friend can directly pay me back money he owes me with a card. That wasn't possible before. They also have a really good chance of closing the "redemption loop," which is a huge, hairy, unsolved problem. They're very disruptive.

"any small business owner will be able to accept credit cards, anywhere. "

Sure, after buying an iphone for around $200 + $100/month in data plan. Not cost effective for a "small" business owner.

"Or my friend can directly pay me back money he owes me with a card. That wasn't possible before. "

Yes, you could do that with paypal, without carrying a huge hardware in your pocket and paying less in transaction fee.

This is not to say they won't make money. They will, but many others will make even more money.

That's presuming they don't already have a cell phone and intend to use mobile data. If they already have a phone (extremely likely), their cost would be more realistically $75 (mid-range Android phone) + 15-30$ a month depending on data plan. And if they have wired Internet and don't want to change up phones, they can simply use an iPod touch ($230 once) and use their existing connection (already paid for).

I don't know who you mean by small business owner. I am sure high end small business owners(coffee shops, bars, night clubs) will eat it up and agree with it. I am talking about taco truck, etc. If there are many transactions/customers, which would be cost effective for the SBO, the data usage might go over the limit, and I am sure ATT/Verizon will have something up their sleeve to over charge(apart from the $30/month) which would make this less appealing, apart from the already high transaction cost.

This objection is idiotic. The number of transactions required to go over a 2GB limit would be in the millions. A 200mb limit would still be in the thousands if not tens of thousands.

On the off-chance you're not trolling, Square wouldn't be processing all the transactions with a single android phone. The other poster's idea was that individual small-business owner would each have a device.

It works on an iPod touch or an iPad with wifi.

Actually there is a lot of dissatisfaction among small and medium-sized retailers / restaurants with their POSes. Expensive to install, expensive to maintain, software that's stuck in the 90s, and shady processing deals. They don't call em POS for nothin. Fixing that is hugely disruptive.

Your argument is based on a false premise. Nobody said things would change "overnight" at every level. Square is starting with the simplest case. No doubt they're hard at work building out a more sophisticated register platform that will move them upmarket.

Funnily enough, my friend's startup is doing a web-based POS system and they have adopted the tagline "POS... Finally it means Point Of Sale again" :-) And yes, you are right, there are several players out there now who are planning to be hugely disruptive in this area, because the incumbents have rested on their laurels too long.