The latest round of funding was led by venture capitalists Kleiner Perkins Caufield & Byers.

Despite reports that Square founder Jack Dorsey was seeking a $2 billion valuation for the company, Square's value has nonetheless quadrupled since its last round in January, when the company raised $27.5 million.

Former Morgan Stanley Internet analyst and KPCB partner Mary Meeker now joins Square's illustrious board of directors, lining up alongside former US treasury secretary Larry Summers and Sun Microsystems co-founder Vinod Khosla, both of whom recently took a seat on the board.

In May, Square widened its assault on the payments market, launching an application designed to replace point-of-sale terminals with iPads and cards with mobile phones. The company currently claims to be processing $4 million in mobile payments every day and expects to hit the $1 billion-per-day landmark within the next year.

The stratospheric valuation of Square comes amid a goldrush mentality in Silicon Valley, as mobile payments projects move off the drawing board and onto the high street. Last week, PayPal announced that it expects to process $3 billion in mobile payments this year, double the volumes predicted last year, while Google CEO Eric Schmidt forecasts that a third of US eftpos terminals will be equipped to handle mobile contactless transactions by early 2012.