Square Will Also Be Wary of Apple
Apple's Entry into the Peer-to-Peer Mobile Payments Market
Square has initiated its IPO at $4.2 billion
In the previous part of the series, we discussed how Apple’s (AAPL) entry into the person-to-person mobile payments market could have a potential impact on PayPal’s (PYPL) growth. However, smaller mobile payments players such as Square are also bound to see an impact from Apple’s entry into this space.
Square was founded and led by Twitter’s (TWTR) CEO (chief executive officer) Jack Dorsey in 2009. Square is one of the leading players in the mobile card reader market. The company generates 95% of its revenue from payments and point of sale (or POS) services.
Square has recently applied to go public at a valuation of $4.2 billion. Last year, it raised $150 million at a valuation of $6 billion, according to a report from the New York Times.
Prior to this valuation, Square had raised funding from a number of investors, including Starbucks (SBUX). Starbucks invested in Square in 2012 at a valuation of $3.3 billion. Square’s changing valuation indicates its changing fortunes in the payments market.
Mobile card readers such as Square accepted by 40% of SMEs
Although the majority of its revenue has been generated in the United States, Square also provides services to sellers in Canada and Japan (EWJ). Square has some positive trends supporting its valuation.
According to a report from Business Insider citing Market Strategies International, mobile card readers are already accepted by 40% of SMEs (small and medium-sized enterprises) across the United States, as the chart above shows.
According to a report from the Wall Street Journal, after PayPal’s Venmo service, Square is the most-used platform for conducting peer-to-peer mobile transactions. However, Apple’s impending person-to-person mobile payments service is likely to give stiff competition to the similar service provided by Square.
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