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Smartphone Payments Make Charitable Giving Easier and Banks Less Necessary

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This year, the jingling of Salvation Army workers will be even harder to ignore. The charitable organization announced earlier this week that its ubiquitous red kettles will now accept payments via Square -- the mobile payment service for iOS and Android devices -- along with their traditional loose change.

A recent story in the New York Times reports that the charity plans to use Square at ten locations in four major cities this year. They hope to augment the $148 million in cash donations received in 2010.  

The Salvation Army hopes that Square will fare better than their earlier efforts to take credit cards. In 2009, only $60,000 in credit card donations were collected.

Over the past few weeks, Square has also initiated a number of new features to help set themselves apart in a growing pay by phone market. According to the Wall Street Journal, the company is, among other things, adding the ability for small businesses to recognize and reward regular customers -- in case they don’t remember them otherwise.  

The update is Square’s second this month. The first update added the Card Case iOS app, which allows customers to pay by Square in some businesses without removing the phones from their pockets. Currently Card Case is only available on the iPhone, but a Droid version is planned.

Meanwhile, online and pay by phone applications are slowly rendering a more traditional business model obsolete. An article in USA Today reports that bank branches have seen a decline in traffic thanks to the rise of online banking and the ability to do things like cash checks by phone.

Bank branches are still necessary -- for now -- and USA Today is clear that major banks have not started closing locations. That said, big banks have been looking for ways to cut costs -- like new checking service fees for TD Bank and Bank of America’s brief, albeit disastrous, debit card fee decision. With revenue concerns as they are, it may only be a matter of time before the bank branches are exclusively on smartphones.
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