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Here in the U.S., many small businesses can face limitations because they don't take credit cards.

The fees and other costs associated with processing plastic is a turnoff for many of these small businesses, so they stick to cash. But new technologies are making it easier for even the taco truck guy or the local plumber to take on-the-spot credit card payments.

Reporter Vanessa Romo reports.

(Soundbite of electric weed-whacker)

VANESSA ROMO: Jeff Barber and Kurt Schuyer are standing at the top of a steep driveway, looking out over a freshly mowed lawn in old Agoura Hills in Southern California. Barber is holding an electric weed-whacker, and Schuyer is holding his iPhone.

Mr. KURT SCHUYER (Co-owner, HybridLawns): I'll go get the homeowner here.

ROMO: Together they own HybridLawns, an environmentally friendly landscaping company. And using Schuyer's smartphone and a small gadget called Square, they're about to bill a client for a month's worth of work.

Mr. SCHUYER: We got the $70 in here for your monthly payment.

Unidentified Woman: All right.

Mr. SCHUYER: And I'll take your card. And it's simple, just a quick swipe like that. There we go. It's authorizing now.

ROMO: Schuyer and Barber started their business two years ago when the pair were laid off from their respective construction jobs.

Mr. SCHUYER: And you've been approved. So I just need to...

ROMO: Since then, they've been mowing lawns, pruning hedges and scooping up leaves for about 20 clients. But Barber says like a lot of small businesses, they've had trouble collecting regular payments.

Mr. JEFF BARBER (Co-owner, HybridLawns): We were trying to go paperless, because we're eco-friendly, but for the most part, you know, we just emailed people. You know, email here's your bill, you know, pay us your bill. Send us a check. Here comes a snail mail. Sometimes they kind of drag their heels a little bit.

ROMO: They say getting paid can sometimes take weeks, which is why they got the Square device: a credit card reader about the size of a postage stamp that plugs into the headphone jack of either an iPhone, Android or iPad. So now, when they show up at the pretty yellow ranch house, Jackie Lacomb can't do what she usually does with a bill.

Ms. JACKIE LACOMB: It sits there forever, and I forget about it. So this makes it great, because it's done as soon as they, you know, come by with the bill, it's here. I'm finished.

Mr. JACK DORSEY (Co-founder, Square and Twitter): We dramatically simplified the way people can start accepting payments so that you can accept them from anywhere.

ROMO: Jack Dorsey is one of the founders of Square. If his name sounds familiar, it's because he's also the co-founder of Twitter. Dorsey says he was thinking about entrepreneurs like Schuyer and Barber when he came up with the idea for Square on-the-go small or micro business owners.

Square opened its doors to the public in October. The device and the software are free. The company takes a flat 2.75 percent of each transaction, plus 15 cents - cheaper than fees charged by most other credit card payment systems.

Mr. DORSEY: And you have to pay off a bunch of these set-up fees and monthly minimums and other fees that look a little bit odd. All you have to do with Square is download it, sign up, and we give you a free reader, and you can start accepting card payments.

ROMO: Square is now processing millions of dollars in mobile transactions every week. More than 45 million people in the U.S. have a smartphone and, as money-exchanging portals, they're a fairly untapped market. Right now, there are only a few products. There's Intuit, another credit card-swiping device made just for the iPhone. Also, a handful of banks let you deposit checks by taking pictures of them, and Chase allows person-to-person deposits via email.

All of this virtual moving of money has people worried about fraud. John Hering of Lookout Mobile Security says that's why companies like Square have built in stringent security measures from the start.

Mr. JOHN HERING (Lookout Mobile Security): They're using very strong encryption and a number of the best industry practices. Now, it's going to be very important that anyone adopting a mobile payment technology makes sure that they're taking steps to keep their mobile device itself safe.

ROMO: In other words, treat your phone like your wallet. Don't leave it lying on a park bench. Hering says rather than fearing the future, think of it as extreme convenience with a little common sense security.

Mr. HERING: When we look at mobile payments in general, I think that it's really the future in terms of payments.

ROMO: Smartphones are the fastest growing segment of the mobile phone market, which means mobile payments are growing, as well. So the next time you're eyeing a brownie at a PTA bake sale with no money and no checkbook, you may want to ask if they take plastic.

For NPR News, I'm Vanessa Romo.

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