Square Inc. is a company that facilitates financial services, merchant services and mobile payment. The company has several software and hardware products including Square Reader and Square Register. It also caters to small businesses with the financing program Square Capital, a direct payment service Square Cash and also Square Payroll. The company was created by Jack Dorsey and Jim McKelvey in 2009 with the app and services launched in 2010.
Square Inc. provides a Point of Sale software application that manages payments and manages transactions for businesses. Advanced products such as the Square Dashboard software prepares cloud-based reports and analyses for sellers including real-time insights on sales, customers, items and employees. The Square Payroll is another tool to empower businesses in hiring and paying employees as well as take care of taxes and human resource management. Sellers can gain customer feedback, oversee digital marketing campaigns and loyalty programs through this utility.
With Square Inc. users can make payments to any vendor that uses chip reader, chip card reader, contactless and magnetic strip readers. The Square Stand is an iOS application which turns an iPad into a POS terminal. It also supports online payments where the card is not present through the POS mobile app, processes payments, transfers cash and manages courier orders of food deliveries to restaurants through various softwares. Square Capital is another one of their products which allows pre-qualified Square using sellers to take out loans based on their POS data.
The company even offers gift cards, instant deposits, square appointments, employee management, customer service and other subscription services to their users. Square Inc. has users from the retail and food-related industries of various sizes including single vendors, farmer’s market sellers and businesses with multiple outlets. The company app is free to download from the Google Play and App Stores. It charges premium users $99 for Square Stand and $29 for the chip Square Reader, while magnetic stripe readers can use the service for free. For every transaction on the credit card, a fee of 2.75% is charged and there are no additional monthly charges or signing-up fees. Manually entered transactions are however charged 3.50% with an extra $0.15 per transaction.
Square Inc. started up on angel investments from multiple parties including Biz Stone, Marissa Mayer, Shawn Fanning, Dennis Crowley, Kevin Rose, Esther Dyson and MC Hammer. It has raised several more rounds of funding since then. Square Inc. was valued at $6 billion in October 2014 which was reduced to less than half by November 19, 2015 when the company’s IPO made it on the New York Stock Exchange at an initial valuation of $2.9 billion. The company however, cut down their losses from 44% of the revenue to 16%, 6 months prior to the IPO. Since going public, Square Inc. has constantly stayed on the growth track.
Recommendation: Buy the dip. (We own SQ shares)
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