Square is an electronic (mobile) payment processor service, provided by Square Inc. It allows users in the United States and Canada to accept credit cards through their mobile phones, either by swiping the card on the Square device or by manually entering the details on the phone. Square has placed its target towards small business owners and new businesses by offering no contract, no commitment merchant accounts. In addition, it recently started to offer Square Wallet to consumers, allowing them to pay using their Smartphone and send gift cards to other Wallet users.

1. UC DAVIS, Graduate School of Management
Technology Competition | 03/15/2013
Rob Loranger, Rohit Arora, Sameer Bakare, Sasi Chandra, Krishna Madhuvarsu

2. Square Overview
• Citi Ventures, Rizvi Traverse Management, and Starbucks Coffee
Company.
• It values the mobile payments company started by Twitter’s Jack
Dorsey at $3.25 billion
• In the three years since it’s been in operation in the U.S., Square
has grown from $1 billion in payments processed annually to $8
billion.
• Starbucks announced today that it has commenced sales of Square
Mobile Card Readers in its 7,000 US stores
• achieved success with some 2.5 million customers
• Mobile payments rate: $90 billion by the end of 2017, up from
$12.8 billion last year

17. Square - Competition

19. Square Paypal ROAM Intuit BOA Groupon Amazon Verifone mPOWA Payleven RevCoin
Register Here Data GoPaym PayWare
ent
Credit & Swiped: Swiped: ? Swiped: Swiped: Swiped: Swiped: X Swiped: Swiped: Swiped:
Debit 2.75% 2.70% 2.75% 2.70% 1.8% + 1.9% + 2.95% 2.75% 2.55%
Card Manual: Manual: Manual: Manually $0.15 $0
Processi 3.50% + 3.50% + 3.75% + Entered:
ng Rates 15¢ 15¢ $0 3.50% +
15¢
Startup Free Free ? Free Free $100 X X ? Free $9.95
Cost
Custome No Phone ? Intuit BOA Groupon Amazon X ? Phone, ?
r Service Phone number; Online, Custome CS Payment email
Number; email Phone r Service s
difficult support; and Chat
to
contact;
Market US, US, ? US US, US X X UK, Brasil, US
Canada Canada, Canada, Poland Germany
Hong UK , Italy,
Kong, Netherla
Australia nds,
Poland,
UK

20. Square – Eco system
• Small merchants
• POS merchants
• Customers
• Affiliate “businesses”
• Issuing Banks
• Credit Card Brands

21. Potential Market
• Large number of small businesses can now accept credit cards
– Mobile payments is massive, rapidly growing but underpenetrated
industry
Opportunity Market Changes Square Positioning
> Expensive traditional card readers > Growing changes in Mobile payments > First mover advantage
> Difficult for small business > Huge revenue potential > Accessible across multiple platforms
owners to use card services > NFC is emerging, card usage prevails > Low transaction cost and ease of use
> Expensive online services

22. Standalone Value
Small Businesses:
• can accept credit cards and noncash payments
• lower cost than credit card companies
• business analytics
Consumer:
• pay without cash
• keep track of payments

23. Square – Future Growth
• Exit Strategy ?
• IPO ?
• Acquisitions ?
– Square to acquire ?
– Other companies to acquire ?
• How can Square defend for a envelopment ?
• This is NOT a winner take all market

24. Square – Platform ?
• Can it open up the payment platform for
developers ?
• Can it open up with wallet platform for the
developers ?

25. Square – International Expansion ?
• Can it expand to Europe, Asia, Africa ?
– Can they get into the countries where other
competition is not yet ventured ?
• There could be some joint ventures or
acquisitions, etc…