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Dorsey wants Square to be synonymous with mobile payments

Jack Dorsey wants Square to be synonymous with mobile payments and believes the current EMV shift in the U.S. will help the seven-year old company accomplish the CEO's ambitious goal.

March 10, 2016 by Will Hernandez — Editor, NetWorld Media Group

Jack Dorsey wants Square to be synonymous with mobile payments and believes the current EMV shift in the U.S. will help the seven-year old company accomplish the CEO's ambitious goal.

Square announced Wednesday, as part of its first earnings report as a public company, that it had received over 350,000 preorders for the company's new EMV-enabled contactless reader.

Dorsey said that while he believes Square's device performs the fastest chip read on the market, the company is encouraging its merchants to push mobile payments and for consumers to make them with major third-party mobile wallets.

"We're taking full advantage of the [EMV] shift," Dorsey said during the earnings call. "We want to associate our logo with the ability to pay with your phone."

Dorsey mentioned how consumers and merchants are miffed at the slower in-store checkout process with chips cards and that mobile payments is a way to erase this problem. Square has a section of its website dedicated to educating merchants about NFC-enabled mobile payments.

"We're still teaching sellers and buyers about paying with and accepting chip and contactless [payments]," Dorsey said. "We have to educate and we're seeing some positive returns from that [effort]."

As for Square's financial results, it beat Wall Street's expectations and the company's stock jumped almost 5 percent in after-hours trading.

Square said it processed gross payment volume of $10.2 billion in the fourth quarter ended Dec. 31, which represented an increase of 47 percent from the same period in 2014.

For the full year of 2015, gross payment volume totaled $35.6 billion, a 50 percent increase from 2014.

Square noted in a press release that ongoing growth with its existing seller base and the new merchants it added last year contributed to the increase in gross payment volume.

Total net revenue, which includes revenue from Starbucks, was $374 million in the fourth quarter, up 49 percent, and $1.267 billion for the full year of 2015, also up 49 percent.

Square's transaction revenue was $299 million in the fourth quarter of 2015, up 45 percent. Transaction revenue as a percentage of the gross payment volume was 2.93 percent compared to 2.97 percent in the prior year period. The company said in a press release it attributed the decline to increases in free processing credits for seller-to-seller referrals and selectively offering custom pricing to larger sellers.

Hardware revenue in the fourth quarter was $6 million, up 215 percent from the fourth quarter of 2014, and for the full year of 2015, it was $16 million, up 124 percent compared to 2014. The company attributed the jump to it contactless reader, which it began shipping to merchants in December.

About Will Hernandez

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Will Hernandez has 14 years of experience ranging from newspapers to wire services and trade publications. Before becoming Editor of MobilePaymentsToday.com, he spent two years as the content manager for PaymentsJournal.com, a leading payments industry news aggregator and information hub published by Mercator Advisory Group. Will spent four years covering the payments industry as an associate editor for multiple publications in SourceMedia's Payments Group based in Chicago.

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