Twitter creator and former Twitter CEO Jack Dorsey has introduced a new card payment system named Square. The payment system uses a small scanner that plugs into the headset port on mobiles and PCs and allows retailers to read the magnetic stripe information from credit cards. Users make a purchase by swiping the credit or debit card through the reader. Card owners can then use touch screen mobiles such as the iPhone or Android devices to sign for goods. Square creator Dorsey donned the stage at Le Web 09 this morning to confirm that the small card scanner will be made available for free. Square is currently being tested by several retailers as part of a private beta in America but should be available to all in early 2010.

The software payment system also offers visual confirmation, allowing users to assign a photo to their profile so vendors can visually confirm the payee's identity. The system will also issue a paperless receipt and allow users to search for their receipts online. Clearly the target for Square is eBay's PayPal system, using the power of popular smart phones and eager retailers the system has the potential to go worldwide. Square also announce it will donate a penny of every transaction a user makes to a cause of their choice.