The app is free, but in order to work, you need a small credit card reader that connects to the iPhone via the 2.5mm headphone jack. The app looks beautiful and has lots of nifty features, such as SMS receipts, the ability to track of your sales online, as well as tip and tax calculation. However, in its current iteration it also has certain drawbacks; for example, you cannot delete or refund transactions.
Without the card reader, the app has been useless thus far. This, however, is about to change. As Jack Dorsey writes on the Square blog: "Today, in addition to releasing clients for the iPhone, iPod touch, iPad, and Android devices, we are opening up our first cut at activating card processing and pricing, and sending out our first production batch of free card readers. All represent just the beginning of what Square is striving to become: a simple payment utility for everyone."
It is however still too early to judge the success of Square. As Dorsey himself admits, opening a merchant account to accept payment cards proved to be a difficult task and the app development has taken much longer than expected. When or if all obstacles are overcome, there's still the question of whether people will actually use the application.
You can download the app for free from the iTunes store [iTunes link].