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Square Payment Processor Overview
- 2. Problem • Processing credit card payments • Upfront costs for POS terminal • Little/no actionable sales data
- 3. Products Square Register Square Reader Cash App
- 4. Persona • Merchants • Small Business Owners
- 5. Financial Information • Q1 2011 - $66M in transactions • 100,000 new users/month
- 7. Business Model • Transactions via its payment products • 2.6% flat fee + 10¢ per swipe • 1.5% for expedited fund transfers • Cash App
- 8. Company History Jim McKelvey Founder Jack Dorsey CFO and Co-Founder
- 9. Startup Grabbing Investors Attention Partnerships Company History
- 10. Secret Sauce
- 11. What’s Hot?
- 12. Competition Company Free Card Reader Cost/Transaction Rate Square Free - 2.6% per trans. Paypal Free - 2.7% per trans. Shopify $9/month - 2.7% per trans. Clover $14/month – 2.7% per trans. (in person) and 3.5% per trans. (keyed)
- 13. Prediction
- 15. Works Cited • https://thefinancialpandora.com/square-a-billion-dollar-company-born- out-of-solving-a-simple-problem/ • https://www.quora.com/Who-is-the-target-market-for-Square • https://fourweekmba.com/square-business-model/ • https://www.pymnts.com/mpos-tracker/2017/square-jack-dorsey-cash- capital-first-data-vantiv-paypal-uk-apple-pay-debit-pymnts-mpos- tracker-mobile-payments-mobile-point-of-sale/ • https://howigotjob.com/parent-company/who-owns-square/ • https://producthabits.com/how-square-became-a-30-billion-company- by-reimagining-payments/ • https://www.cnbc.com/2020/11/06/square-stock-soars-after-massive- earnings-beat-helped-by-cash-app-.html • https://www.fundera.com/blog/square-competitors
Editor's Notes
- Processing credit card payments was the headache. Sellers do not need to get into the hassles of complex systems, rules, and necessities of the payment industry and would only have to pay 2.75% of each transaction as a processing fee to Square.
- Think: Craigslist. Millions upon millions of "merchants" / "consumers" dying for a better solution for payments. Think: Bands. Loads of bands looking to sell merch, etc and need a streamlined solution to do so. Think: ALL merchants who do not want to pay the upfronts for a point of sale terminal and then maintenance. The beauty in Square is in the elegant software solution layered on top of the hardware that makes this possible (iphone / ipad) With the free device, Square is going to do for brick and mortar merchants what Paypal did for online merchants. I'm Square's biggest fan!
- The double revenue from 2019 to 2020 is due to cash app due to bank like products on the app like piggy bank, crypto and stock trading.
- $2,000 worth of handblown glass that artisan Jim McKelvey couldn’t close the deal and sell.
- Being a startup, Square rose to success in no time. With several rounds of fundings and numerous acquisitions, Square diversified its services and products. Not only the benefits it offers but also the hardware that is helpful for users and business owners. He began by writing “140 Reasons Why Square Will Fail,” an itemized list of every conceivable obstacle that could jeopardize his nascent venture. Every entry in Dorsey’s list had a counterargument. Key to Square’s early success was establishing key partnerships with well-known, nationwide companies that could offer immediate access to their credit card processing infrastructure, which was integrated into tens of thousands of physical stores. In August 2012, Square negotiated a partnership in which coffee retail giant Starbucks would use Square exclusively to process card payments in 7,000 of its locations. In addition to the exclusive partnership, Starbucks also agreed to invest $25M in Square, an agreement that gave Square a valuation of approximately $3.25B. As part of the deal, Starbucks’ CEO Howard Schultz was also given a seat on Square’s board.
- Designs their products around easing the transaction process for smaller business owners.
- Designs their products around easing the transaction process for smaller business owners.
- I think square has a huge potential for continued growth and success with regard to their services, however, I feel that the lack earnings could lead to the company's downfall. Moreover, if payment industries decide to change their transaction rates, Sqaure could fall into trouble and will need to raise their flat rate to stay in business.