UK-based mPowa became Square's latest competitor last month with the US launch of its dongle and app-based system for turning phone handsets into credit card readers.
The company made an aggressive pitch for business, boasting that it would be "capitalising on weaknesses" in Square, arguing that its system is superior because it offers chip and PIN payments and merchants can use it through their existing banking arrangements.
It is not the product that has drawn Square's attention though, but "what appears to be mPowa's blatant copying of an image from the Square Website" for use on its own, says a letter sent to mPowa by Fish & Richardson, a law firm acting for Square.
The letter, obtained by TechCrunch
, focuses on an image on Square's site that shows a man's left hand holding an iPhone and his right hand, "extending from a blue denim sleeve", swiping a credit card through a Square reader.
On mPowa's site is a very similar "copied" image, complete with blue denim sleeve and "the exact same angle".
Says the letter: "The copying of Square's image is clear and obvious. Indeed, it appears that mPowa's infringement is intentional and deliberate, and that mPowa's attempt at imitation may extend to other key Square intellectual property, including the Square Website and Square's trademarks and trade dress."
MPowa CEO, Dan Wagner - a 'serial entrepreneur' not adverse to publicity - has dismissed the letter, saying: "The attempt by Square to distract our focus on providing the business community with mobile POS via this unfounded legal missive will be wholly unsuccessful."
However, a TechCrunch source suggests the photo will probably be tweaked, with the all-important denim shirt making way.square mpowa