Jack Dorsey has a bold idea: make accepting a credit card as easy as sending a tweet.

Until recently Jack Dorsey was best known in the business world as the creator and chairman of Twitter, which has transformed the way millions of people communicate and get information. These days, though, Dorsey, 34, has been garnering bigtime buzz for his latest venture, Square, a service that aims to upend the banking industry by enabling every smartphone to become a credit card reader -- and, he hopes, eventually replacing plastic altogether.

Dorsey says he is trying to bring Twitter-like simplicity to the complex world of credit card processing. He's developed a small, rectangular card swiper (a square, get it?) that plugs into the audio jack of mobile devices -- no bulky credit card terminal needed. He also offers super simple software that helps businesses track sales, taxes, and other financial data. But Dorsey's real innovation is the ease that Square provides for anyone to accept credit cards: Unlike banks, Square doesn't ask its customers to set up a merchant account, pay monthly fees, or sign a multiyear contract. Its pricing structure -- Square charges vendors 2.75% plus 15¢ per transaction -- isn't the cheapest deal in town, but it may be the most straightforward.

As a result, the company, which launched two years ago, says it is signing up about 50,000 small businesses each month, including many entrepreneurs who don't have a fixed location. (Think babysitters, food trucks, flea-market vendors.) "I'm done buying clunky big things that don't work for very long," says Josh Levine, who uses Square readers at his two Pepples Donuts locations in the Bay Area. "Square is simple, it's cool, it's straightforward." More