By Afiya J. Watkins
According to the Associated Press, financial services startup Square is trying to turn the swipe of a credit card into an act of generosity. To kickoff this initiative, Square is introducing a red credit card reader that will serve as a charitable alternative to the millions of white readers the San Francisco company has distributed since its inception five years ago. The Square readers plug into the headphone jack of smartphones and tablet computers so the devices can become electronic sales terminals, empowering more merchants to accept credit cards.
The new color unveiled Wednesday is part of an alliance with (RED), a nonprofit organization that has raised more than $250 million to fight AIDS in Africa during the past eight years. Many recognize (RED) as a brand licensed with partnership companies such as Nike, American Express (UK), Apple Inc., Starbuck’s, Converse, Gap and Armani to name a few. The concept was founded in 2006 by Bono of U2 fame that is well known for his activism and philanthropic endeavors. Together with Bobby Shriver of the ONE/DATA; the pair sought to engage the private sector for the purpose of raising awareness and funds to help eliminate HIV/AIDS in Africa.
For Square’s part, it is charging $10 for each red reader unlike the free white readers currently available. Square will collect its standard 2.75 percent processing fee on each red reader purchased, and donate the remaining $9.73 from each sale to (RED).
Square hopes to raise $250,000 for (RED). This will require that the company sell approximately 25,700 of the red readers. This is an ambitious project with the red reader only being sold in the U.S. Canada and Japan also process payments and have business dealings with Square but the company is continuing to offer only their white readers in those countries.
The red readers have been programmed to spur even more generosity and giving. Each time a sale is processed through Square’s red reader, the electronic receipt emailed to the customer will include a link offering the consumer a chance to donate to (RED), too. The receipts soliciting (RED) donations will be automatically delivered for as long as a merchant chooses to use Square’s red reader.
The device will be a virtual “AIDS-fighting machine”, said Deborah Dugan, CEO of (RED). Dozens of merchants in Los Angeles, New York, Atlanta and Miami already have committed to buying the red reader. The red reader becomes the latest commercial emblem promoting (RED)’s cause.
The (RED) partnership marks another step in Square CEO Jack Dorsey’s effort to raise his company’s profile and build the fortune that he accumulated as co-founder of the online short messaging service Twitter Inc.
Dorsey started Square in 2009, shortly after Twitter replaced him as its CEO. He remains Twitter’s chairman and one of its largest shareholders with a 4 percent stake currently worth about $1.4 billion.
According to the Associated Press, Square hasn’t yet disclosed its revenue or reported whether it’s profitable as a privately held company. It is widely expected that the company will initiate filings to go public sometime this year.