Twitter founder, Jack Dorsey, has launched a new on-the-go payment system called Square. Square will give users the ability to pay for goods and services with a credit card using their smartphone. 

At the LeWeb 09 conference in Paris on December 9, Jack Dorsey showed consumers how the payment system will work and provided further details about Square.

Square works with a very small device that plugs into your smartphone audio jack. Users swipe the magnetic strip of their credit card through the device to activate the payment. The information on the magnetic strip is then converted into an audio sound and is processed within the mobile application on their smartphone.

The system works without any contracts or monthly fees and Square will give one penny from every transaction to a charity of your choice.

Mobile payments using Square are fast. Jack Dorsey said you’ll be able to make a credit card payment on the go in under 10 seconds.

The device used to make Square payments will be given out for free. Consumers will be able to pick one up from merchants or order them online from the Square website,

For the moment Square is being trialed as a limited beta in the US but should be available to the US public in March 2010.