A new application for smartphones has launched which enables you to pay for items with your smartphone.

The Square, which is made by Twitter co-founder Jack Dorsey, enables you to pay for items quickly and easily through your mobile phone.

The way in which The Square achieves this feat is by using a small device that plugs into the audio-input jack on mobile phones. The device is free for merchants and can be delivered once they sign up for the service.

The Square can also be used to generate receipts which can be stored online for easy financial management. For added security payees can create a profile with The Square which enables the merchant to use photo ID to recognize if the person paying is who they say they are.

The application also enables easy loyalty management for merchants and will lead to addition rewards for those using the service.  The Square also has no trouble dealing with tips and can easily be setup to tip by percentage of the bill or by whole unit amounts.

The Square is funded by transaction fee costs, which are around the same as the rest of the market. When considering that setup is free and easy , it’s probably a no-brainer for small businesses.

The Square is currently only available on iPhone, iPod touch and iPad and all Android mobiles, with more phones to be added soon.