The new Square iPhone case, designed with accessory developer Griffin Technology, kicks off a program that encourages the development of accessories for Square payments hardware.

"The Griffin case is the first product in the Works with Square program and currently the only product with the [Works with Square] badge on the packaging," says Square spokesperson KC Simon.

Griffin's case grips the Square reader, preventing it from swiveling when it's plugged into the smartphone's audio jack. When the reader is not plugged in, it can be stored in a compartment on the back of the Griffin case.

Going forward, Square will work directly with accessories manufacturers interested in adding their products to the program, Simon adds. Simon declined to discuss the business arrangement Square has with product developers.

It makes sense for Square to attempt to leverage its installation base of about 3 million merchants to develop relationships with accessory developers, says Gil Luria, payments analyst with Wedbush Securities.

The new case represents a "very incremental innovation" and Square is likely to see a small revenue stream from these types of products, Luria says. "The dongle fits in the phone pretty nicely already, so merchants will have to decide if the case makes that much difference."

Unofficial Square accessories are fairly common.

Jacksonville, Fla.-based Simple Concepts LLC created a protective pouch for the Square reader in 2010. A flurry of similar products can be found on Amazon.com, eBay, SquareKeyChain.com, Egisworks.com, Etsy.com and squarepouchbydesign.

In the past, Square has not been affiliated with the accessory products, other than alerting Square merchants of their availability. Still, it is unclear at this point whether merchants already developing products gain any advantage in entering the Works with Square program.

Griffin offers its iPhone case online for $19.99. The companies say current orders are shipping within two weeks.

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