Twitter founder to launch mobile wallet

Jack Dorsey, the creator of popular social-networking site Twitter, has showcased a device that enables mobile phones to make credit-card transactions that he plans to give away for free.

The ‘Square’, a small add-on peripheral about an inch in size, will plug into the headphone jack of compatible touchscreen mobile phones (such as the iPhone). It contains a magnetic strip reader that will allow users to read credit cards, and then a downloadable application will deduct funds accordingly in a similar manner to retail point-of-sale devices. Users will verify the transaction by registering their fingerprint on the phone’s touchscreen. The device is self-powered by the magnetic energy of the card swipe itself.

Reportedly, there is no revenue model for the device, although it will allow users to make voluntary per-transaction charity donations.

Dorsey told attendees of the LeWeb internet forum in Paris that the device was somewhat inspired by his own microblogging site. “"The financial world is amazing right now because there's a clean slate,” began Dorsey, as reported by CNN. “A lot of these industries are looking for something very small and innovative."

“My co-founder is a glass artist. He sells things that people don't need - $2000 glass faucets. They're beautiful. If he could not take credit cards, he wouldn't make the sale because no one carries around $2,000 in cash. So we looked at it. Ninety percent of the US has moved to credit cards, but it's still very difficult to accept them.”

The Square has a rough release date of March 2010, although the developers are still working to ensure that the device is fraud proof.