The company’s results come to show that it could attract bigger businesses as customers, with a 61 % increase in the volume of payments transacted from larger sellers. Share price has risen with 18 % this week, marking the biggest intraday gain since its public market debut, according to Bloomberg. Square’s CEO, Jack Dorsey has been trying to convince investors that Square can grow amid competition from PayPal Holdings and First Data in the transactions industry, the site continues.
The company started by selling smartphone plug-ins to let food truck vendors and other SMEs accept credit cards. Now Square’s expanded into other businesses, including loans through Square Capital and tools for managing inventory and analysing sales.
If in the first quarter Square cited delays signing new investors to help back its lending business, the following quarter, Square provided USD 189 million in loans, up 123 % year-over-year and added five new investors. The company has few customer acquisition costs for this program and checks the credit risk of its borrowers with data gathered from servicing the companies through the payments platform.
Even though Square was able to swing toward profitability this quarter, it still reported a net loss of USD 27 million. Significant spending will be needed to support Square’s future products and services, and competition increases as the company targets larger businesses.
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