Square, a new venture launched by Twitter co-founder and chairman Jack Dorsey could turn the fledgling mobile-commerce space into a mainstream shopping arena. The company sells a tiny device that plugs into a mobile phone's headphone jack and scans swiped credit cards. With the device, a shopper can pay for a product and receive an invoice by email.

The venture - which is currently being tested by the smallest of businesses - also has a tiny, altruistic component: One penny of each transaction amount is donated to a charity of the shopper's choice.

Limited Beta

Square is beginning with a limited beta, but plans are in the works to roll out the service on a more widespread basis early next year. Venture capital provider Khosla Ventures as well as angel investors have kicked in seed funding to get the venture off the ground. One of the beta testers is Cheri Mims, owner of the Lilybelle flower cart near Square's office in downtown San Francisco (via the New York Times). She, along with just a few other merchants, has been using Square for a test period that has lasted several months. Mims plugs the device into her iPod Touch and connects to the internet using the Wi-Fi connection in the plaza where she operates her cart.

Larger Retailers

Square's focus on very small businesses makes it unique in this space.

Until now, most innovations in online - or mobile - payments have been aimed at the larger retailers, and even these are just coming to market now. Toys 'R' Us, for example, only began offering transaction capabilities last month to mobile shoppers.
This month Crate and Barrel and CB2 created dedicated mobile shopping sites. Both mobile apps are powered by Usablenet, which has developed mobile sites for several large retailers.