What if you can pay with your credit card via your mobile phone?

Software engineer Jack Dorsey is the Co-Founder of Twitter, and was the CEO until October 2008. In May 2009, Dorsey announced his latest project code name Squirrel, which was later changed to Square. Square is a new mobile payment startup. It’s both an app and a piece of hardware that allows users to accept and pay via physical credit cards on a mobile device.

In February 2009, Jim McKelvey wasn’t able to sell a piece of his glass art because he couldn’t accept a credit card as payment. Even though a majority of payments has moved to plastic cards, accepting payments from cards is still difficult, requiring long applications, expensive hardware, and an overly complex experience. Square was born a few days later right next to the old San Francisco US Mint.

Here is a demo made by Jack Dorsey

Today the Square team is focused on bringing immediacy, transparency, and approachability to the world of payments: an inherently social interaction each of us participates in daily. We’re starting with a limited beta and rolling out to everyone in early 2010.

Square is backed by Khosla Ventures and a team of angels which was publicly announced yesterday. The full list includes: Marissa Mayer from Google, Dennis Crowley from Foursquare, Kevin Rose from Digg, Ron Conway, Biz Stone of Twitter, Joshua Schachter, Shawn Fanning (who’s starting a new venture with Dave Morin), Zachary Bogue, Andrew Rasiej, Greg Yaitanes, Jean-David Blanc, David Lee, Esther Dyson, Robin Chan, First Round Capital and Fritz Lanman. Basically, it’s an extremely impressive list.

Most notable are Marissa Mayer and Dennis Crowley, making their first investments, and it seems like a great investment to get into.

Square has gotten off to a fast start these last few months. When it raised $10 million, it was rumored that the company was valued at $40 million. For a company whose product isn’t even available to the public, that’s not bad.

Square, Inc. has offices in San Francisco (Product & Engineering), Saint Louis (Operations), and New York City (Risk & Partnerships).