The One Reason Why Square Could Fail

August 24, 2011 1:02 am

We are big fans of payment startup Square – we have spotted multiple stats on square transaction volumes. So we were surprised when we spotted this paper- “Held Hostage – How the Banking Sector Has Distorted Financial Regulation and Destroyed Technological Progress” by Aaron Greenspan. Felix Salmon has a clean extract below:

“You’ll need to file e-reports with the Financial Crimes Enforcement Network. In order to do this, you’ll need a Windows computer (not a Mac), running Windows 2000 or XP, and Internet Explorer (not any other browser). Plus various unwieldy plug-ins. Secure!

In order to check whether a given Social Security number belongs to a dead person — a basic security check — the US Department of Commerce will charge you rates starting at $995 per lookup, and rapidly rising to as much as $14,500.
When companies ask for a driver’s license, they currently have no way of checking online to see whether that license is valid.

Of the 50 states, not one yet has a web-based license application process.

None of the major online payments companies has yet managed to get is licensed in Wisconsin.

None of the major phone companies has got licensed in any state, despite the fact that they all want to move into the space in one way or another.

Universities’ money-transmission programs, like Harvard’s Crimson Cash and Stanford’s Cardinal Dollars, are also unlicensed. “Consequently,” writes Greenspan, “the presidents, provosts and trustees of every private university in the nation with such programs (which are exceedingly common) are unknowingly committing federal crimes, and could be incarcerated.”

Maryland’s license fee is $4,000.00 in even-numbered years, but $2,000.00 in odd-numbered years.”

Statistics Source: Reuters

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