Square processing $5B annually, up 25% since PayPal Here launch
Square is now processing mobile transactions at an annualized rate of $5 billion. This is an increase of 25 percent in its payment volume in the weeks following the March introduction of the rival PayPal Here service, COO Keith Rabois told Bloomberg.
First introduced for Apple's (NASDAQ:AAPL) iPhone in late 2009, Square enables small businesses and other users to accept credit and debit purchases by swiping cards through a small dongle that plugs into the device's audio jack. Square charges a flat fee of 2.75 percent on all transactions and promises users no contracts, monthly fees or hidden costs.
More than 1 million merchants are now using Square to accept card transactions, Rabois said. He added that Square now makes cash from sales recorded before 5 p.m. available in the merchant's account on the next business day, compared with as many as five days for competing payment processing systems.
"Sole proprietors and small businesses live and die by their cash flow," Rabois said. "They don't have access to capital; banks don't give them loans. They need to take the money they make today and use it to pay bills, buy things and pay employees the next day, so having access to funds is super-crucial for them."
Rabois declined to specify how Square has slashed the processing delay, citing competitive demands. He also declined to confirm whether Square is profitable.
Earlier this month, AllThingsD reported Square is raising a new round of financing that values the company at $4 billion--roughly four times what it was worth less than a year ago. Square has raised about $137 million from investors including Kleiner Perkins Caufield & Byers, Tiger Global Management, Sequoia Capital and Khosla Ventures. During its last round, completed in June 2011, Square raked in $100 million, vaulting the firm's valuation to more than $1 billion.
Square faces competition from a number of rival mobile payment solutions including eBay's PayPal Here, unveiled last month. A small, triangle-shaped dongle that attaches to a phone or tablet's audio jack in the same fashion as Square's own payment processing reader, PayPal Here charges merchants 2.7 percent per credit card or PayPal transaction, a .05 percent savings over Square. Last week, eBay CEO John Donahoe announced more than 200,000 merchants have signed up for PayPal Here.
- read this Bloomberg article
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