Visa Backs Twitter Co-Founder’s Mobile Payment Startup Square

(Reuters) LOS ANGELES, April 27 – Visa Inc. has thrown its weight behind a mobile payments venture created by Twitter co-founder Jack Dorsey.

The credit-card company has made an unspecified investment in Square Inc., a 2-year-old service that helps businesses and consumers pay with credit cards on a mobile phone or Apple Inc. iPhone, both companies said in a statement.

In return, a Visa executive gets to sit on the advisory board at Square, which is also backed by Sequoia Capital and Khosla Ventures.

Square’s service employs a miniature magnetic card-reader that plugs into a device, such as an iPhone or Google Android phone. CEO Dorsey in March returned to the microblogging sensation he helped create, taking up the post of executive chairman — in addition to his responsibilities at Square — to oversee product development.

Square previously raised $37.75 million in venture funding from First Round Capital, Khosla Ventures and Sequoia Capital, according to Thomson Reuters (publisher of peHUB). It raised $10 million from Khosla Ventures and individuals in December 2009, an undisclosed amount from First Round in January 2010, and $27.75 million from Khosla and Sequoia in March of this year, Thomson Reuters reports.

Edwin Chan, Reuters, with additional reporting by peHUB staff