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Square adds Apple Passbook support with mobile gift card launch

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Square is rolling out a new mobile gift card service integrated with Apple's (NASDAQ:AAPL) Passbook virtual wallet application.

The updated Square Wallet version 2.5 for Apple's iOS and Google's (NASDAQ:GOOG) Android enables users to purchase and redeem gift cards in amounts ranging from $10 to $1,000. Any merchant using Square services to process credit and debit cards can offer gift cards through the Wallet app, with no additional setup required, Square COO Keith Rabois told Bloomberg News. "These are mostly empowering merchants that haven't had gift card programs," Rabois said.

Square users with devices running Apple's iOS 6 mobile operating system can store gift cards in Passbook, which collects prepaid cards, movie tickets, transit passes, retailer loyalty cards and related documentation in one application for more efficient user access. Last month, Apple updated Passbook to support digital gift cards for its own Apple Store retail chain. Consumers may now purchase gift cards through the Apple Store application for iOS and send them via email, and the recipient may download the card to Passbook for in-store redemption.

Square Wallet operates in conjunction with Square's Mobile Card Reader system, which enables small businesses and other users to accept credit and debit purchases by swiping cards through a small dongle that plugs into their smartphone or tablet audio jack. Square charges users a flat 2.75 percent fee on all transactions and promises no contracts, monthly fees or hidden costs. Square is now processing $10 billion in annual mobile payment transactions, up from $8 billion in mid-September and exploding from $2 billion a year ago.

The introduction of Square gift cards further escalates the mobile commerce startup's rivalry with eBay-owned PayPal, which introduced its own triangle-shaped PayPal Here card reader earlier this year. PayPal supports gift cards across its digital commerce platform. "It's clear that in 2012, the idea of a piece of plastic to redeem digital money is outdated," PayPal Director of Communications Anuj Nayar told Bloomberg News. "Gift certificates live in PayPal's digital wallet and can be spent wherever you can use PayPal, not just from a mobile device."

For more:
- read this Bloomberg News article

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