In February 2009, Jim McKelvey wasn’t able to sell a piece of his glass art because he couldn’t accept a credit card as payment. Even though a majority of payments have moved to plastic cards, accepting payments from cards is still difficult, requiring long applications, expensive hardware, and an overly complex experience. Square was born a few days later.

Square is a simple and extremely small piece of hardware (with accompanying software) that lets sellers take credit card payments straight from the iPhone. It allows the seller to select the cost of the payment, they then swipe the credit card, have the buyer sign their name with their finger, and you then have the option to send a receipt to them either as an email or as a text message. It also offers amazing anti-fraud functionality by allowing you to see a Google map of where the item was purchased using the iPhone’s GPS function. Check out the demo of the prototype below by Kevin Rose, founder of Digg.com. Square should hopefully be released in the next several months.