Square, the billion-dollar start-up from Twitter co-founder Jack Dorsey, has been a consistent innovator in the mobile payments space. First there was the basic dongle-based system, which let retailers accept credit cards via a small plastic cube attached to an iPad's headphone jack. Then there was the tab system, which allowed customers to pay simply by checking into a merchant from their smartphone. And now the company has announced its latest innovation "automatic tabs."

Automatic tabs, a new feature of the company's Card Case app, takes advantage of the geo-fencing feature of iOS 5 and lets customers check in to merchants automatically whenever they're within a 100 meter radius. When enabled, a customer can walk up to the register at any establishment where they have previously created a tab and pay for their goods simply by saying their name. There's no need to ever touch a smartphone.

In the new system, the customer automatically pops up on the cashier's iDevice whenever the geo-fence is triggered and can then be charged to the credit card associated with their Square account. After the transaction, a receipt is sent via text message and/or email.

Square's approach is a compelling alternative to competing NFC technology, such as that employed by Google's mobile payments solution, Google Checkout. With NFC, customers tap their smartphone to a receiver in order to make a transaction— a fundamentally different experience than paying by saying your name.

Check out automatic tabs in the latest version of Card Case.

[via AllThingsD]