Despite the obvious threat posed by Apple Pay, Twitter co-founder Jack Dorsey’s mobile payments start-up Square has raised US$150m in an investment round that vales the company at US$6bn.
The latest round has been led by the Government of Singapore Investment Corporation.
Previous investors, including Goldman Sachs and Rizvi Traverse Management, also took part in the investment, according to The New York Times.
Dorsey, who co-founded Twitter in 2006, aims to create a platform that empowers small businesses by enabling them to accept credit-card payments on mobile devices.
Its core product connects to smartphones and enables firms to swipe the credit card to process payments.
Seismic changes in mobile payments
The investment couldn’t have happened at a more interesting time in the payments space.
Last month, at the same time Apple was revealing its new iPhone 6 and iPhone 6 Plus smartphones, as well as its Apple Watch, the Californian tech giant revealed a well-advanced plan to disrupt the world of NFC (near field communications)-based payments.
The company revealed a new wireless payment system called Apple Pay. The system uses a dedicated NFC chip called the Secure Element.
Apple Pay supports credit and debit cards from major payment networks, including Visa, American Express and MasterCard. Major banks in the US that represent 83pc of card purchase volumes in the US will use it first.
As well as 258 Apple stores across the US, retailers including Walgreens, Whole Foods Market, Macy’s, Bloomingdales, McDonald’s and Walt Disney will accept purchases from the Apple iPhone 5, iPhone 5s and iPhone 5c, as well as the new iPhone 6 and 6 Plus smartphones.
The big question is whether Apple Pay will make Square’s payments system for small businesses redundant or whether they will complement one another as part of a broad swathe of NFC and m-commerce payment services coming on stream.