Square iPhone Credit Card Payment System Demo [Video]

The iPhone is capable of many things, thanks to the amazing App Store. Here’s something that we can expect to see in the future–accepting credit card payments with the iPhone! The demo you’ll see below the Square iPhone Payment System (prototype) as demonstrated by Mr. Digg himself, Kevin Rose.

How it works is a dongle plugs into the iPhone’s mic port, which will let you swipe a credit card for processing (can you spot the digits of Kevin’s credit card?). The entire process is fully automated after that down to the finest detail, including the ability to email receipts (with description, picture, and location of purchase all embedded). What’s cool is you just sign your signature right on the iPhone’s screen with your finger. Neato.

This system makes it easy for small businesses (hot dog vendors in Vancouver come to mind) and fellow craft fair enthusiasts to accept credit card payments for those people who don’t carry cash. Definitely an innovative idea that takes advantage of the iPhone’s capabilities.

What do you think? Hot or Not?