Bankers Cautiously Intrigued By Square

The youthful founders of payment startup Square, Jack Dorsey and Jim McKelvey, created a stir at the NACHA Payments conference yesterday. After their keynote panel, we asked attendees what they thought of the company and its scheme for letting people accept payments using a mobile phone and a small white cube. Everyone we spoke to had a strong opinion."I think it's great," said a Southern state clearinghouse executive. "I immediately called my wife, who is a chiropractor. I told her this would be a great way for her to accept payments from her clients - typically she goes to their house for treatments. She mostly collects credit card numbers during the day and calls them in at night. Using Square would cause her less problems, she could just swipe the card numbers on the spot and be done."

But a northern state clearinghouse executive was more reserved. "The Square guys are very young, they don't have the payment understanding," she said. "They haven't worked through the security risks, the scenarios of what could go wrong. They're appealing to Facebookers, who don't have that fear of fraud. That said, they do have the right idea in that payments need to be easier; consumers are going to want the same ease of use they get with text messages on their mobile phones. We shouldn't shy away from that, we should figure out how to work with Square to build the right risk controls, the right sharing of information to meet needs of the younger generation. We need to come to a happy medium."

A young Texas bank executive had a deer-caught-in-the-headlights expression. "We know we need to do something about mobile payments, but we're not sure what," she said. The programs she's looked into to launch a mobile initiative are prohibitively expensive. Square seemed interesting, but she felt she would need to research it further.