Square - About the company

I was just working on my monthly summary and read this:

If you’ve ever paid with a credit card at a local vendor, there’s a good chance they used a Square device to take the payment. Square also provides many other services available to their customers. One of the most profitable is Square Capital, which really leverages their data advantages to offer extremely profitable and low-risk loans to their customers.

That was my old spiel, and it still applies. But Square is so much more now. Their three pillars have become:

They started by taking payments in the real world, but they didn’t stop there. They created back-office software, then websites, then enterprise, etc, etc, etc.

Banking Services
First, Square realized they had some amazing data on the actual money their customers bring in, so they decided they could use that to offer low-risk loans, and get paid back with industry-shattering default rates of only 4%! Then they developed a consumer division and started a Venmo-like Cash App that now has 7 million monthly active users! Oh, and they are also automating payroll for their customers.

Other than the US, Square is now in Canada, Japan, Australia, and the UK, and they have a lot of other opportunities, as well as growth opportunities within those.

As my girl Sarah Friar (CFO) explains:

“It’s all about the cohesiveness of the ecosystem. And when we’re able to pull it together in a seamless way, we can take data, for example, in payment processing…we know the data of your business, so with that we’re able to do things like underwrite you for Square Capital to facilitate a loan. Elsewhere in the system, we can take something like timecards…and then we can automate the payroll. So everything we do is about how do we save that business time, and…no one else has pulled it all together. Others talk about integrated this and integrated that, but there’s no integration that’s actually built seamlessly from the get go.”

Square has developed an Amazon-like knack for leaving no stone unturned. And I credit Friar with bringing them to this place. Their TAM must have tripled in the last two years.

So that’s my new “about the company” for Square.



Square Capital’s loans to their customers are indeed great business with 4% default rates. The market’s reservations are around the loans to their customers’ customer on which less data is available to minimize default rates