Mobile Payment App Square Gets Funding From Visa [Twitter Founder Jack Dorsey's Square Payment System For Mobile Devices Gets Funding Through Visa]

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Talk about a vote of some confidence–seems that mobile payment app Square, (reportedly founded by Twitter’s own Jack Dorsey) which works on a variety of devices including iPhones and Android phones, got some venture capital going from a rather unlikely source: Visa.

Visa isn’t the first investor in the mobile payment system that we’ve been talking about here for some time now–they’re joined by venture capital firms Khosla Ventures and Sequoia Capital. Visa reportedly got a seat on Square’s advisory board in exchange for its investment, but the amount of cash involved in said investment is as yet unknown.

Just as a recap, the Square payment service basically gives you a dongle that you can plug into your Android or iPhone / iPad that lets you take payments remotely over a 3G or wi-fi connection. Then, when you actually use the Square reader (the name of the dongle in question), Square takes a bite of each transaction you run through the dongle. If you swipe someone’s card, you shell out 2.75 percent. Keying the transaction into the included software, meanwhile, takes 3.5 percent of the transaction plus an additional 15 cents.

The dongle and software are free if you sign up out at Square’s website, or you can pay Apple $9.95 for the sublime privilege of shopping for one at an Apple store, though Square has previously offered $10 credits for anyone who signs up with Apple.

For Visa to be throwing in on this represents a pretty significant vote in Square’s favor–clearly Visa likes the idea, enough to dump money on it–but it does give Visa a little bit of edge as it will encourage people to use their credit cards more by offering them more places in which to do so. And that represents more money in Visa’s pocket, as well as in Square’s, and in whoever’s using these to process their payments. Sounds like a win-win all the way around to me.

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