According to an article by Greg Kumparak on MobileCrunch yesterday, Mophie, manufacturer of iPhone hardware accessories is getting into the mobile payments business.

While currently a hardware provider only, Greg speculates that Mophie may also be getting into the software side of things.  Should they enter into the payment business, they will be competing head-to-head with Square.

This is another good example of how consumer wireless devices are going to force big changes on traditional hardware and providers in the retail device and payments space.

In my previous blog post, I talked about how mobile will affect retail. One of my 6 implications for retail was the need to prepare for the coming of consumer devices, like the iPhone, to the enterprise.

“4. Ready or not, devices like the iPhone are coming to the retail enterprise. People are using them in their daily lives and will see the value of using them at work. Security and other concerns need to be addressed, but departments and business units will push retail CIO’s to incorporate these tools sooner rather than later.”

Square is a good example of what I mean.  Square is a new company led by Twitter co-founder Jack Dorsey.  I’m not sure if Square is the next big thing; there is of course some skepticism out there.   I do believe that over time, companies like Square will fundamentally change the landscape for payment and mobile device providers in the retail and restaurant space.

According to Eliot Van Buskirk’s article on the Wired website, the Square business model looks like merchant banking and additional, related services like loyalty and e-receipts for the low end of the market – single store operators and individuals selling via Craigslist.  Square will not put a dent in Verifone’s business soon.  Square’s power is in demonstrating how to take a consumer device and use it to make payment services and mobile retail applications accessible at a price point that is 80% lower than current solutions.

Impact on the Customer Experience

Square has the potential to enable significant improvements in the customer experience for both retailers and restaurant companies.   With something like Square, retailers and restaurant operators can facilitate an improved customer experience at a much lower price point.  For example, by allowing payment at the table, the payment process at a restaurant is easier and faster (valuable to both the customer and the restaurateur).

No Shortage of Challenges

There are plenty of issues, not the least of which are potential hacking of the device to steal credit card information, general security of the consumer device in a wireless environment, remote administration concerns and the lack of protection against viruses and other malevolent software.

Conclusion

Who knows if Square will be the winner, but the team and the funding behind it represent the opening shot in a battle with incumbents which will spur innovation to the benefit of retailers, restaurant companies and the customer experience.