SquareInc. CEO Jack Dorsey said his company will continue pushingbusinesses and customers away from magnetic swipe technology and toward near-field-communicationpayments such as Apple Pay or Android Pay.
Dorsey said authenticated payments, enabled by NFC as wellas chip cards, are far more secure than the magnetic stripe. While Square canread chip cards, Dorsey said he prefers NFC payment technology because of thespeed.
"We really like [chip cards]; we prefer NFC. … We wantto move more people toward that," he said. "And then, eventually,more and more toward software."
NFC payments, including mobile payments as well as NFC cards,can process a transaction in less than a second, compared to an average of 10seconds to 15 seconds for chip cards. Those precious seconds determine how manypeople wait in line and, ultimately, how many transactions a business cancomplete in a day, Dorsey said.
Dorsey also envisioned a move toward software-only paymentsfor cybersecurity benefits. Software can be updated immediately to react topotential vulnerabilities, allowing companies to stay 10 steps ahead ofhackers, he said.
Dorsey spoke as part of the opening session of the annualmeeting for the Securities Industry and Financial Markets Association, held inWashington, D.C. On other topics, he expressed an enthusiasm for blockchaintechnology and the security of a distributed ledger that would not becompromised if any one machine failed. Further, he called blockchain acontinuation of the internet, which connected computers across the world.Similarly, blockchain allows users across the world to contribute to the sameledger.
"I'm really excited about [blockchain concepts] inparticular because the more we distribute our intelligence, the better answerswe'll have," Dorsey said.
R. Martin Chavez, chief information officer for , interviewedDorsey and tried to pin the CEO down on a position regarding interchange fees.But Dorsey largely side-stepped the politics of the issue, saying it was a goodthing that new technology should be able to drive down costs.
"I do believe there are so many other businesses withinfinancial services that people really value, so it's a value equation againstall the services that one can consider at a financial institution, but I dothink it's right that we continue to make sure that we're driving costs down sowe can include more people on the rails," Dorsey said.
Also, Dorsey said Square has envisioned itself as a partnerfor finance companies rather than a disruptive force. He said the company'spriorities have been improving customer verification systems, making its cardreader free for businesses, lowering interchange costs and increasing the speedof payments generally.