I3 Verticals, Inc. (IIIV)

[YanksGhost]

Strategic gaffe at Square may open the door for IIIV and others to grow in Fin Tech at lower cost and risk. Square has introduced Square Installments where clients can make supply purchases using SquarePay and charge them on an installment basis to be paid off over time at interest. This makes Square a defacto unsecured lender with no collateral backing who must carry both the debt and imputed interest on their balance sheet. The interest, if/when paid is accretive, but any unpaid balance is an uninsured total loss. This provision is likely to appeal only to small businesses strapped for cash and willing to pay bills to keep doors open by paying on a roughly equivalent basis to putting them on a Visa/MC with as much as 24% interest charges.

Not smart. The first big blunder I have seen from Dorsey.