Twitter founder Dorsey working on iPhone credit card reader

Tech blogs have been rife with rumours about a new project from Dorsey, codenamed Squirrel, for months, with a mobile payments system the main suspect.

Separately, it was reported over the summer that technology used to turn iPhones and iPod touches into credit card readers was being tested in New York.

The Square iPhone Payment System is a piece of plastic that fits in to the headphone jack of the phone. The customer swipes their card in the device which transfers the data to an iPhone app. Once the amount to be paid has been entered, the customer confirms by 'writing' their signature with their finger. A receipt is then sent to their e-mail address.

Now, tech site engadget has identified Dorsey as the man behind Square after noticing that the domain provided on the system's receipts, squareup.com lists its contact e-mail address as togetherbilling@paybysquirrel.com.