Dorsey tweeted the new milestone after close of business Wednesday adding: "Think of all the individuals & businesses behind that number."

Square provides merchants with a piece of plastic that fits in to the headphone jack of Android-based handsets, iPhones and iPads, and acts as a card swipe for processing payments. The reader is shipped for free with Square charging a flat fee of 2.75%.

The company - which now claims to be signing up to 100,000 merchants for the service each month - raised $27.5 million in a funding round in January, and announced plans to double staff numbers from 64 to 150 by the end of the year.

Square's technology was also showcased by Apple at yesterday's iPad 2 launch event. Ailing Apple chief Steve Jobs used the platform to reinforce the company's growing stature as an online payments repository, saying that Apple had just passed 200 million accounts with credit cards and one-click purchasing built-in.

"Amazon doesn't publish their numbers. But it's very likely that this is the most accounts with cards anywhere on the Internet," Jobs said.

Finextra verdict it's an impressive achievement by Dorsey, but with little insight into costs, it's difficult to discern how far Square may be from reaching break-even. The company says it is now signing up 100,000 merchants per month, which is double the figure presented in autumn, so the device would appear to be gaining traction. All the same, the firm's business model is predicated on a mag-stripe swipe, just as the US appears to be on the verge of a switch to chip-based cards. Where such a move would leave Square is anyone's guess. Note the data from Jobs as well - with the next iPhone model widely tipped to include NFC capabilities, Apple is poised to make a big splash in the payments business. Whether this creates ripples or waves, we'll have to wait and see.