iPhone "Square" Payment

This piece of hardware is interesting. I've heard there was a software application for the iPhone that allowed for people to take credit card payments. I'm not exactly sure how it worked. There is now an advancement to a potential credit card payment application through the iPhone. This software, and hardware combination is being pushed by one of the Twitter co-founders, and Digg founders. This attachment, and software is good for "receiving cashless payments if you're a small business owner looking to exploit irresponsible credit card debt or just the average Joe hocking goods at a garage sale, farmers market, or Craigslist. ". ~ Engadget Mobile

Seems pretty interesting to me. Here is a video demo of the product in action. This is just the Beta version: