Square

In two thousand and nine, a glass blower in San Francisco lost a sale because she could not accept credit cards. The terminal cost hundreds of dollars and banks would not approve her. Jack Dorsey built a white plastic reader that plugged into an iPhone headphone jack. He mailed it for free. The reader cost Square eight dollars to manufacture. The company gave it away. The business model was inside the swipe. Square charged two point six percent plus ten cents per transaction. A ten dollar coffee generated thirty-six cents. A food truck processing one thousand dollars a day paid twenty-six dollars in daily fees. The reader was the door. The processing fee was the rent. Merchants adopted Square because it asked for nothing upfront and took a sliver of everything afterward. Then Dorsey watched transaction data pile up. He could see which merchants sold more on weekends, which ones had growing revenue, which ones were reliable. Square began offering loans based on that data.