This week I had back to back experiences with iPhone payment systems. I figured I’d document it here and show the differences between the two. Also I’ll shed some light on which, in my opinion, will win.

First, above is the image I took after signing my iPhone based receipt generated by Square. I had a delicious coffee at Sightglass Coffee in SOMA, SF. Just like at Starbucks I order my over-priced (it is SF) Latte and she whipped it up. Then when asked cash or card, I obviously said card and she pulled out a wifi enable iPod touch. The iPod had a funny little ‘square’ plugged into the ‘jack’. The barista (if they’re called that outside of starbucks) sturdied the square and swiped my card. Then she handed me the iPod for me to sign with my finger. The next step was a prompt with the request, “how I would like my receipt, sms or email?”, so I requested email and entered my address. Very simple, I was done.

Below is the email that I received with a link back to my web based receipt.

This is an image of that receipt on Square’s web site. I was very intrigued by the inclusion of the “This is your first payment here.” This data got me thinking about the possible foursquare integrations, etc. It’s inherently social because Square begins to use payments as checkins (like Foursquare). They can tie in the location, with the transaction, with other peoples transactions around the same time. With a Blippy / Square combo you could have payment authorized checkins, with the social blast of the transaction.

My next experience was at the Apple store on Market St. in San Francisco. The experience was similar in that when I pulled out my credit card for payment I was greeted with an Apple device, this time an iPhone. This iPhone was sitting in a cradle of some sort that had a slot for the card on the right hand side. Much larger than the Square but still with one swipe I was charged, not interacting with the phone at all. The person manning this device asked for my email which he punched in and I was off. $30 bucks later for a Snow Leopard update, I got an email that was similar to Square’s except it had a PDF attachment with the receipt.

This is the Apple receipt. The gist here is that it just gets the job done. The payment process was simple but there isn’t really anything interesting about this, we’ve all seen a receipt.

So which system do I think will make the most impact? Well, if Apple lets Square into the app store which they must or it will be a PR nightmare, I really think that Square’s system has a significant upside. Here’s why:

1) The experience was a bit smoother

2) The trust is higher in that I was required to sign the receipt and if someone else were to use my CC I would immediately get an email about the transaction (once I associate my cc to my email, this should be automatic).

3) The distribution of the tiny Square device that plugs into any jack (not just iPhones) is small and cheap. They even plan to try and distribute these devices for free.

4) The potential integration with other social systems is huge. Although not everyone tweets, or blogs, 400 million people are on facebook and there are tons of interesting ways that venues could use this dynamic, recorded by actual transactions, to reach new customers.

Lastly, adoption is the only worry. We need to start to condition people to understand that a mobile device is no longer just a cell phone. With UberCab we’re training drivers that a mobile device can help then attract new business. With USAA’s new iPhone app you can actually deposit checks using images of those checks taken from an iPhone. This is not a phone anymore, it’s a computer, and with things like Square, UberCab, or new banking systems the world is changing literally in the palm of our hands.