What Are The Components in The Square Reader (Bill of Materials) - Quora

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Square (product) Square (company) Business Strategy Electronics Business

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What are the components in the NEW contactless
What are the components in the square reader (bill square reader (bill of materials)? What is the cost of
of materials)? each?
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Who created the Square card reader?
1 Answer Can I use the Square card reader with a PC?
Brian Roemmele, Alchemist & Metaphysician Could I legally sell my old stuff using my square

reader?
Updated 20 Jul 2012 · Upvoted by Mike Townsend
From Squirrel to Square What results has Square seen from selling its card
readers in Starbucks?
Starting out as a project by Jack Dorsey (business person) and Jim McKelvey called Squirrel
When will the Square card reader be available in the
(How did Square get its name?), the Square Card Reader has had a long journey.
UK?
The original Square card reader was a brilliantly simple design that allowed Square to What are the main reasons to use use square footing?
rapidly expand with low unit costs for the free device. The most recent version (summer
2012) is more complex and far more costly to manufacture then the original. The prior
devices had very basic electronics that were powered primarily from the Hall Effect created
by swiping the Payment Card. The new device is powered from a 3.5 volt Lithium battery,
although not officially announced, has over 50 parts with a micro controller. There are a
number of reasons that Square is now using encryption, I spoke to this here: What impact
will Square's addition of encryption to its card reader have?.
Note: In this review I will use only information that is not in any way confidential and is
available publicly.
New Encrypting Square Card Reader.
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Inventory Of Parts (sorted by relative cost): Sign In
1 - Texas Instruments MSP430G2412 (http://www.ti.com/product/msp430... ) very low

voltage micro controller.
1 - Texas Instruments TLV2762 Dual 1.8-V, Micro-power, Rail-to-Rail, Single Supply

Amplifier (http://www.ti.com/product/tlv2762 ) audio amplifier
4 - Surface mounted Transistor, Diodes and power control chips
1 - 3.5 Volt Lithium Coin Type battery with wire tab
1 - Printed Circuit Board, double sided.
17 - Surface mounted Resistors
12 - Surface mounted Ceramic Capacitors
1 - 3.5mm Audio Jack
1 - Magnetic Strip Read Head
4 - 0.5 Inch Copper wires
1 - Injection Molded Thermoplastic Case 2 pieces
2 ounces of Solder
0.2 ounces of Glue
The electronic parts used for the new Square Encrypting Card Reader are all typical "off the
shelf" parts for this class of circuit.. Just about all of the parts are easily sourced from a
multitude of manufactures and distributors.
Most Important Chip
The most costly individual part is also the most important chip in the device, the
MSP430G2412 micro controller. It has a build in Data Encryption Standard (DES) as a block
cipher that uses shared secret encryption based on symmetric key algorithm system. The
key lengths can be DES: 64-bit key 3DES: 192-bit key. Triple DES
(http://en.wikipedia.org/wiki/Tri... ) is the highest security standard currently used in
typical retail transaction environments. However, this standard is usually only used when a
Debit Card PIN number is being processed. DES is typically not used for Payment Card
Numbers and typical data found on the 3 tracks of a magnetic strip. There could be some
Elliptic Curve Cryptography (http://en.wikipedia.org/wiki/Ell... ) used also.
Circuit Logic
The Circuit design logic and PCB layout follows good design practices and is well in
specification as predicated by the primary chip manufacture's guidelines and electronic
engineering standards. I like the chip selection and the way the MSP430G2412 is being
implemented. However I did detect a potential issue with unwanted parasitic battery drain
from one device I tested when not in use, however the current drain is really quite minor.
The battery should last about 5 years with typical use with-in nominal operating
temperature range. From my analysis there are a number of implemented but currently
unused features of the TI MSP430G2412 active in the new Square Card reader. This may
portend to a future direction for this device.
Manufacturing Process
The devices are manufactured and assembled in China and/or Mexico by a well known
contract manufacturer. The PCB is wave soldered in a semi automated process (there is
some hand soldering observed). The versions I have conducted research on seem to have
been hand assembled and finished to the plastic cases, although this could be the results of
working the alignments of the automated manufacturing jigs. In any case the design of the
device does currently require at least some manual hand finishing.
Once assembled, the devices are shipped to the US as part of standard container shipping
systems and arrive at the US distribution and fulfillment center located in Orange County,
California. The manufacturer seems to be on a 45 day completion cycle from build, ship to
receive.
Product Packaging
The cost of the product packaging actually can add up to 25% of the final cost. There are
two primary versions of the Square Card Reader packaging: the version that is dropped
shipped to the user and the version that is dropped shipped to retail stores like Target and
Walgreens. The version that is shipped to the retail outlets has a far higher cost basis with
sophisticated packaging that includes a magnetic closure flap and a "$10 Gift Card" to offset
the retail cost of the device, typically $9.99. The devices that are shipped directly to the
consumer is a simpler package with a die cut foam and cardboard carrier and envelope.
Cost
In this analysis I will not do an individual cost of goods and just work with average total
costs. Costing a mass produced low cost electronic device will always be a moving target
based on the actual quantities ordered per manufacturer run, overseas shipping cost
fluctuations and other potential issues that impact cost. Without packaging the new Square
Encrypting Card Reader is likely to cost about $9.00-$14.00. There are some circumstances
where the costs can actually be as high as $20, however I am rather certain Square is doing a
number of things to keep the costs with-in $10.00.
The devices distributed in the retail ready packaging will add up to $8 per device before any
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rack jobber and/or slotting fees (a substantial cost). The direct to consumer drop ship will Sign In
add about $4 per device for packaging, shipping and handing fees at the drop ship facility.
Thus we can conclude that the average final dielivered cost for the encrypting Square Card
Reader is about $15.00. If the device was purchased at a retailer, Square experiences at least
and additional $5-$10 cost based on the $10 consumer rebate and rack jobber fees and
slotting fees.
The Future
I will predict that Square needs to produce a number of devices in the future. We are
starting to see this with the in car, customer facing payment system for Taxis used in tests in
New York, San Francisco and other areas. We will also see a version that allows for EMV
(http://en.wikipedia.org/wiki/EMV ) for expansion in to Europe and perhaps in the future
used in the US. Square is also likely to expand into other interesting hardware devices that
will extend the utility of the existing service and new services they are developing.
Send In The Clones Or How To Get Your Heart Broken
Like any electronic device, in a matter of days one can obtain a working clone from
hundreds of contract manufactures in Asia. This is also the case for the Square Card
Reader. With-in days of the original Square Card Reader gaining media attention, I was
contacted by representatives of contract manufactures that were offering "Squares" for
about $1.00 in low quantities. The same is true with the encrypting Square Card Reader, I
actually learned about this version of the device from contacts in China months before the
device actually shipped.
It really is heartbreaking to see the sum total of hundreds of man hours of design and
engineering become a cheap copy overnight. I know this feeling personally, it never leaves
you.
Thus today if you have a PayPal account (I know, ironic) you too can order up your "Squares"
and "be in big business world working credit card":
Square Original ~$1.00 in 3000pcs quantities - http://www.alibaba.com/product-g...
Square Encrypting - $12 in 1000pcs quantities - http://www.alibaba.com/product-

g...
This company will actually give you a "package" that promises that you too can offer a "free
credit card reader ,it puts people in business" and has "2 Gorgeous App,Simple, elegant app
for your Android, iPhone, iPad, or iPod touch":
http://www.alibaba.com/product-g...
Conclusion
Square is not and never will be just the Square Payment Card Reader, this is just the means
to justify an ends. This may be perhaps 5% of the final ingredients that has made Square a
spectacular success. Square is a vision interpreted by some of the best artists and artisans
in the Silicon Valley.
The vision was to democratize the ability for anyone to accept retail Payment Card
transactions. This was no easy task in the early days of 2009 and in some ways has become
far more complex as a multitude of competing products enter into the market. The success
of these companies and the success ultimately of Square will not be in the details or even
the marginal differences in costs to produce a device. Success in this market will be directly
related to the ability to have a true dialog with the 90% of merchants none of these
companies have been able to successfully reach.
Thus far Square has done very well, but the journey ahead is not nearly the same as the
journey they have been on.
12.1k Views · View Upvotes · Answer requested by Mike Joslin
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7/3/2017 What

Square (product) Square (company) Business Strategy Electronics Business

Brian Roemmele, Alchemist & Metaphysician Could I legally sell my old stuff using my square

New Encrypting Square Card Reader.

1 - Texas Instruments MSP430G2412 (http://www.ti.com/product/msp430... ) very low

1 - Texas Instruments TLV2762 Dual 1.8-V, Micro-power, Rail-to-Rail, Single Supply

4 - Surface mounted Transistor, Diodes and power control chips

1 - 3.5 Volt Lithium Coin Type battery with wire tab

1 - Printed Circuit Board, double sided.

17 - Surface mounted Resistors

12 - Surface mounted Ceramic Capacitors

1 - 3.5mm Audio Jack

1 - Magnetic Strip Read Head

4 - 0.5 Inch Copper wires

1 - Injection Molded Thermoplastic Case 2 pieces

0.2 ounces of Glue

Most Important Chip

Send In The Clones Or How To Get Your Heart Broken

Square Original ~$1.00 in 3000pcs quantities - http://www.alibaba.com/product-g...

Square Encrypting - $12 in 1000pcs quantities - http://www.alibaba.com/product-

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