Twitter creator Jack Dorsey is launching a new startup this week called Square. The service allows just about anyone with a smartphone to take card payments everywhere they go. Square is both a software and hardware solution. The application is expected to be sold for around $1 and the card swipe dongle will be offered for free.

Initially the service will be available on the iPhone, but support for Android is coming soon. Square is currently looking to hire an Android client engineer.

The potential uses for this service are virtually endless. I imagine it will be a boon for small business owners who don’t want to go through the lengthy process of getting their own merchant account and card processing software. Even in its early stages, Square is already valued at $40 million.

TechCrunch has posted a short video demonstration of the service.

Customers can sign for their purchases using the touch screen.

Receipts for transactions can be sent via email or SMS.

The idea is brilliant but very simple, so I will leave this post short. For more info see the full report on Wired.