Molded Ceramic Capacitors Class 2: Fill & Download for Free

From Squirrel to SquareStarting out as a project by Jack Dorsey (business person) and Jim McKelvey called Squirrel (How did Square get its name?), the Square Card Reader has had a long journey.The original Square card reader was a brilliantly simple design that allowed Square to 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.Inventory Of Parts (sorted by relative cost):1 - Texas Instruments MSP430G2412 (http://www.ti.com/product/msp430g2412?CMP=AFC-conv_SF_SEP) 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 amplifier4 - Surface mounted Transistor, Diodes and power control chips1 - 3.5 Volt Lithium Coin Type battery with wire tab1 - Printed Circuit Board, double sided.17 - Surface mounted Resistors12 - Surface mounted Ceramic Capacitors1 - 3.5mm Audio Jack1 - Magnetic Strip Read Head4 - 0.5 Inch Copper wires1 - Injection Molded Thermoplastic Case 2 pieces2 ounces of Solder0.2 ounces of GlueThe 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 ChipThe 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/Triple_DES) 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/Elliptic_curve_cryptography) used also.Circuit LogicThe 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 ProcessThe 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 PackagingThe 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.CostIn 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 rack jobber and/or slotting fees (a substantial cost). The direct to consumer drop ship will 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 FutureI 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 BrokenLike 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-gs/468360158/Square_Credit_Card_Reader_for_Iphone.htmlSquare Encrypting - $12 in 1000pcs quantities - http://www.alibaba.com/product-gs/540377082/mini_encrypted_mobile_credit_card_reader.htmlThis 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-gs/461628947/Iphone_magnetic_head_card_reader_credit.htmlConclusionSquare 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.