Square, the payments provider founded by Jack Dorsey, is launching a service that will enable anyone with an email account in the United States to send cash directly to another person with a debit card.
Here’s how Square Cash works: once a debit card is associated with an email account, that email account holder can send a message with a dollar value in the subject line of the email to another person. By adding “email@example.com” to the CC line, it flags Square to execute a payment with the card on record that corresponds to the email account.
The recipient then gets an email that looks something like this:
The transaction is done free of charge, and anyone with a debit card and a bank account can accept the payment. If the recipient doesn’t already have a debit card connected to an email account using Square, he or she will be taken to another landing page to put in information for a debit card associated with a bank account. That money is then deposited in one or two business days.
The service essentially attacks a major pain point — being able to send money quickly without having to go through the lengthy process of writing a check, signing up for a new app or withdrawing cash from an ATM to make the payment. If it seems kind of like a hack, that’s intentional since the service is supposed to be available to as many people as possible, product lead Brian Grassadonia told BuzzFeed.
“It was this simple idea of allowing somebody to send an email to send somebody money. Just by CCing cash@square, that would be enough for us to know to send money from one person to another,” he said. “It’s crude, but we felt potential, and the reaction we got from the company in terms of using it ourselves felt amazing. It felt like it was something that hadn’t existed before and really created a market that didn’t exist.”
It currently works for any email provider and bank account, provided the account is in the United States. Square is also compliant with many payment regulations and has a large fraud detection program that will track payment activity and look for someone taking advantage of the account — say, if the email account is hacked and used by someone other than the owner.
The challenge, as always, is whether it is easy enough to use in lieu of signing up for another service, like Venmo, which also uses text messaging for its payments processing. Grassadonia said two sticking points work in Square’s favor: email works better because it has similar reach, is more formatted and makes more sense because the fields make it easier to understand its use. Secondly, the money goes directly from bank account to bank account without an interstitial account like PayPal.
One concern, however, is that the email does look remarkably like some phishing emails, and could give scammers ideas on how to dupe potential victims into giving up credit card numbers by masquerading as a Square Cash email. Square, for its part, is a sponsoring partner for the Anti-Phishing Working Group, along with other companies like Google and Yahoo — which work to ensure emails that look like those Square would send wouldn’t land in an inbox.
For now, the transactions are free, though Grassadonia wouldn’t rule out alternative ways to monetize the service in the future. For example, Square’s original card reader that plugged into a headphone jack was free, but the company also sells a full Square-designed register stand and cash register product at a relatively high premium compared to the rest of the industry.
“Right now we’re just really focused on creating the best possible customer experience we can. We do believe free is the best way to do that,” he said.