Ian Duncan Owner Sam Penix makes a coffee at Everyman Espresso. Customers now swipe their credit cards through an iPad to pay

When web designer Matt Norris wants a coffee at Everyman Espresso, he doesn’t reach to his pocket for cash or a credit card. With a quick few swipes on his iPhone and a look at the barista he has paid and his drink is on its way to being made. For the barista’s part, he just looks Mr. Norris in the face, confirms his identity and the transaction is complete.

Everyman, on East 13th Street, is an early adopter of Square, a mobile-based payment system developed by Twitter founder Jack Dorsey. The company’s name derives from the little square card reader that connects to a merchant’s (or anyone’s, for that matter) iPhone or iPad, turning it into a payment device, an approach a number of other companies are also taking. In May, Square launched its new product, the card case, which stores regular customers’ details and allows for flesh payments like that made by Mr. Norris for his coffee.

Following in the footsteps of a reporter from Fast Company, I tried out Square at Everyman, opting for the more conventional method of swiping my card. It works pretty much as you might expect: run the card through the white plastic reader, which connects to the iPad’s headphone jack, and sign using the touch screen and a finger. That last part was a little awkward – the result was a childlike scrawl that only loosely approximated my signature, but it was apparently sufficient for my bank.

Ian Duncan Square wants iPads to replace the cash register.

In a neighborhood where some traditional businesses such as bodegas are struggling, Square has been pitched as a straightforward, low cost way to start taking card payments. But in many ways it highlights the dual character of small businesses in the East Village. At Everyman Espresso customers – many of whom had laptops out and treated the coffee shop as their office – were comfortable surrendering financial information to an iPad, elsewhere that might not be the case.

Still, the potential applications are broad. The system only needs a 3G Internet connection to work so could mean food carts, street vendors and farmers markets accepting plastic. Once WiFi Internet comes to Tompkins Square Park later this summer, the whole place could be turned into a bazaar. Perhaps most excitingly for customers, the way Square charges businesses could also mean an end to minimum purchases on cards, which are now common in bars and smaller stores.

Sam Penix, owner of Everyman Espresso, did not previously accept cards at all. She had been looking into a point of sale system — the standard way of accepting cards and tracking stock – which would have cost almost $5,000. Then a friend introduced her to Square. The company hooked her coffee shop up with an iPad and the card reader and now, Ms. Penix said, she is doing nearly $250 a day in card sales. “A great deal of them are new customers,” she said, adding they might previously have walked on to a chain.

Motek, a crepe shop on St. Marks Place, was also approached by Square. Owner Maor Vaanuhu said he has been similarly impressed by the system’s cost and ease of use.

Ian Duncan Ms. Penix is an early adopter of Square.

A function in the iPhone app lets users find other businesses using the card case. Motek and Everyman Espresso are the only two East Village spots, but card case launched with just fifty users nationally, making the neighborhood something of a proving ground. Kyle Zink, Square’s marketing manager, added the system is been used widely and said the company has shipped half a million readers.

“The common conception is that it’s tech heavy and only getting adoption on the coasts,” he said in a telephone interview. “That’s not the case.”

Usually, credit card companies charge merchants a flat fee – potentially as much as 20 cents – and take a percentage of each sale. Mr. Vaanuhu said he was paying 3.5 percent for an American Express transaction. Square charges merchants a flat rate of 2.75 percent on all transactions and, for businesses like coffee shops that rely on high volumes of sales and low margins, that can make a big difference. “Bottom line, I pay less,” Mr. Vaanuhu said.

For delis facing rising rents and increasing competition, the promise of luring in tech-savvy (i.e. young and wealthy) new customers and a cut in fees might seem attractive. But many already accept cards and are committed to a point of sale system, so the economics of Square might not make sense. An employee at East Side Deli on Avenue B said his manager was approached by Square but was not tempted by its system. A manager at Avenue A Minimarket, found the corner from Motek, said the rate the company is charging is higher than what it currently pays. The mayor’s office is keeping an eye on Square and its competitors, but the company said there are no immediate plans to enable food stamp payments on the system.

Despite those problems, there are other reasons for businesses to be interested in Square. Maria Baugh, co-owner of East Seventh Street bakery Butter Lane, said her ultimate aim is for the store to stop accepting cash payments at all. While other businesses focus on the cost of accepting credit cards, Ms. Baugh said cash brings risks of its own – not least those of being robbed or of having employees with sticky fingers find their way into the till.

Credit cards themselves took the best part of three decades to catch on widely. Ms. Baugh thinks paying through iPads could be a similar moment. “We’re just seeing the first waves of real change,” she said. Referring to the new technology, she added, “Some people are going to be shy and wary and others will adopt it quickly.”

Unsurprisingly, that is what Square itself hopes. Mr. Zink compared the situation with Square to that of paying by credit card through a Web browser a decade ago. Initially, consumers were cautious, concerned about fraud but those worries eventually dissolved.