Visa Extends Cash, Credit to Mobile Payments Start-up Square

Visa is giving mobile payments start-up Square and its founder Jack Dorsey (Twitter’s co-founder) a great deal of credit for helping to revolutionize the way mobile users pay for products. As a result, Visa is putting some cash behind that credit.

This week, Visa announced an investment of an undisclosed amount in Square, which makes mobile phones and tablet computers – like the iPad- a mobile credit card reader.

As reported by the New York Times, the move by Visa is particularly telling of the growth and promising future of the mobile payments industry.

In addition to the infusion of capital, a Visa executive will also join Square’s advisory board.

Keith Rabois, Square’s chief operating officer, tells the NYT that the relationship between Square and Visa “was a natural one because Square could convert the 27 million businesses that don’t accept credit cards into Visa customers.”

“We’re empowering people to accept credit cards that historically have not,” Rabois says.

Visa, however, maintains that Square isn’t necessarily a rival to the credit card giant.

According to Ryan Donovan, a Visa spokesman, “We believe that Square helps to drive acceptance of payment cards in a segment that has been historically underserved.”

Square says an average of 100,000 new merchants are now signing up for the service every month.