Square seems to be acting much more like Google than its founders’, Jack Dorsey, first big business success, Twitter. While Twitter has had a slow and steady approach to making money through its extensive social media network, Square is much more willing to try a little bit of everything to find something that turns a profit, writes Billy Bambrough
Though Twitter’s inability to make money is apparently a mere annoyance if its share price is anything to go by, Square IPO’ing right now would be disastrous for the company. One of its latest money making schemes is Square Cash, not to be confused with the similarly named Square Capital, a loan service that the payments company launched earlier this year.
Square Cash has from 27 August been updated to support people sending money from their bank account-linked Square app to mobile phone numbers, regardless of whether the receiver uses the app or is even familiar with the concept.
Even though Square loses ~10c per transaction, according to Forbes, the company has taken the approach that getting more people on board with the service is worth the loss. Take up certainly is not to be sniffed at, as can be seen from the image Square recently released below, but there is a lot more loss ahead for Square before you’ll over hear people asking you to "Square them the money".
A snapshot released by Square of an average days Square Cash transactions. One Quora user guesstimated that around 800 transactions were being made each day
Customers were already able to use Square Cash to send and request money from people via email, by CC’ing a Square email address into the email and specifying the amount in the subject line.
The confusion around sending money this way to people unfamiliar with the service in a country like the US is that people being very rarely at a loss of ways to pay is a gigantic hurdle for the company and one that I have yet to hear a convincing argument to surmounting.
Square seems to be blowing through its cash reserves at a phenomenal rate, sparking rumours that the company is to seek a further $200m in investment at a valuation of $6bn.
Whether a company with revenues of $550m, a loss of $100m in 2013 and a whopping $340m already raised since 2009 still thinks a further $200m is going to change much is a debate for another day.
The field is about to become more crowded as Amazon has announced that it will soon be moving into the mPOS arena and we have yet to see how the competition will already squeeze Square’s already razor thin profit margins even smaller.
Square has also fought to distance itself from rumours that it is seeking that big ticket sale to one of the established tech companies, seemingly with pockets deep enough to cover outrageously expensive acquisitions of companies with almost zero money making potential.