Followers | 679 |
Posts | 140863 |
Boards Moderated | 36 |
Alias Born | 03/10/2004 |
Sunday, April 14, 2019 9:24:18 AM
By: The Motley Fool | April 12, 2019
Square Card targets an underserved market with an excellent distribution plan.
Square (NYSE:SQ) introduced the Square Card, a business debit card, back in January. The debit card is linked to cardholders' merchant accounts and offers a 2.75% rebate on purchases made with other Square merchants.
The Square Card follows in the footsteps of Square's Cash Card, which enables Cash App users to access the funds in their account immediately. Cash Card has been a meaningful contributor to Square's subscription and services revenue growth. Square Card could be an even bigger contributor, bringing in $100 million in annual revenue by 2022, according to analyst Josh Beck.
Here's why Square Card could generate a significant amount of revenue for Square in a short time, and why that's just part of the benefits of Square's latest product.
Servicing the underbanked
Square Card meets an important need that impacts a lot of Square's merchants. Beck said roughly 40% of small businesses don't have a business bankcard. The Square Card fills that need, enabling merchants to keep business expenses separate from their personal expenses more easily.
Square has developed a big business around providing services traditionally provided by banks to its users. Square Capital offers loans to merchants that banks would overlook. And Cash App is taking on a life as more of a consumer banking app than a peer-to-peer payments app.
Square's existing relationship with its merchants gives it a simple go-to-market strategy, where it can tell merchants about the Square Card right in their sales dashboards. The unique 2.75% cash back at other Square merchants also produces a word-of-mouth marketing effect, where merchants and vendors are likely to talk about the card to other Square merchants.
Square's unique capabilities of finding and serving the underserved market will enable it to grow the number of Square Card users rapidly. Beck expects cardholders to spend $100 billion on Square Cards in 2022, resulting in $100 million in revenue for Square.
Developing a network effect
Beyond the direct benefits of merchants spending money on the Square Card, Square could realize additional benefits from the potential network effect created by its cash back perk. Since merchants are rewarded for using the Square Card with other Square merchants, they're incentivized to choose them over merchants or vendors that don't use Square. And if a business spends a lot of money at a merchant or vendor, it may be able to sway them to switch to Square's payment processing.
Square is taking a behavior its merchants already exhibit -- spreading Square by word of mouth -- and incentivizing it by offering cash back on the Square Card.
Creating a network of merchants promoting its core payment processing service gives Square a wider moat to protect it from the competition. Square has started developing a moat by creating an ecosystem of services primarily monetized through payment processing. Those services enable it to compete on price for larger merchants and convenience for smaller merchants.
Square Card is another part of the ecosystem, but it also produces a network effect to reinforce Square's moat. So, not only will Square Card produce a good amount of revenue for Square, bolstering subscription and services revenue to an estimated $1.43 billion next year (up from $592 million last year), according to Beck, it also supports the overall growth of Square's core business.
It's hard to believe what this company means to the self-driving revolution
Our tech analyst was blown away when one obscure company offered him a ride in a self-driving car with no safety person behind the wheel! And no… it wasn’t Tesla or Google’s Waymo.
But the REALLY big deal for investors here is not necessarily the car, but that our analyst thinks this company has what it takes to dominate in its area and produce technology that will change the world for decades to come… mostly because of one certain characteristic.
What’s more, David Gardner also likes this company and has recommended it TWICE now to his members… along with two others in the self-driving space.
Read Full Story »»»
• DiscoverGold
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Your Due Dilegence is a must!
• DiscoverGold
Recent SQ News
- Block Innovates Bitcoin Mining, DOJ Proposes 3-Year Prison for Changpeng Zhao, and More Crypto News • IH Market News • 04/24/2024 05:50:55 PM
- Apple Terminates 614 Employees, Disney Unveils June Crackdown on Password Sharing, and More Updates • IH Market News • 04/05/2024 11:38:57 AM
- Block to Announce First Quarter 2024 Results • Business Wire • 04/04/2024 09:23:00 PM
- Exxon Mobil Forecasts Earnings Decline, Twilio Seeks Board Tenure Changes, and More News • IH Market News • 04/04/2024 11:30:20 AM
- Bitkey commence à expédier les premières unités de son dispositif matériel et ajoute des fonctions de sécurité et de récupération • Business Wire • 03/13/2024 10:10:00 PM
- Afterpay Expands to More In-Demand Categories with New Spring Merchants • Business Wire • 03/13/2024 01:00:00 PM
- Bitkey Starts Shipping First Units of Its Hardware Device, Adds Security and Recovery Features • Business Wire • 03/13/2024 12:27:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 03/06/2024 11:04:30 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 03/04/2024 10:31:45 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/23/2024 10:11:42 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/23/2024 10:08:05 PM
- Uniswap Skyrockets 55% with Incentive Proposal, Avalanche Confronts 4-Hour Shutdown, and More • IH Market News • 02/23/2024 06:26:18 PM
- Goldman Sachs Reconsiders Fed Cuts, LUNR Surges Over 40% in Pre-Market, and More • IH Market News • 02/23/2024 01:03:59 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/23/2024 12:06:53 AM
- Form S-8 - Securities to be offered to employees in employee benefit plans • Edgar (US Regulatory) • 02/22/2024 09:51:43 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 02/22/2024 09:42:06 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/22/2024 09:11:06 PM
- Block Announces Fourth Quarter and Full Year 2023 Results • Business Wire • 02/22/2024 09:05:00 PM
- U.S. Futures Surge on Nvidia’s Stellar Performance, Global Markets Respond Positively • IH Market News • 02/22/2024 11:05:39 AM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 02/21/2024 10:40:10 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 02/21/2024 10:39:40 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 02/21/2024 10:39:04 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 02/21/2024 10:38:14 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 02/20/2024 10:29:28 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/09/2024 09:05:56 PM
Bantec Reports an Over 50 Percent Increase in Sales and Profits in Q1 2024 from Q1 2023 • BANT • Apr 25, 2024 10:00 AM
Cannabix's Breath Logix Alcohol Device Delivers Positive Impact to Private Monitoring Agency in Montana, USA • BLO • Apr 25, 2024 8:52 AM
Kona Gold Beverages, Inc. Announces Name Change to NuVibe, Inc. and Initiation of Ticker Symbol Application Process • KGKG • Apr 25, 2024 8:30 AM
Axis Technologies Group and Carbonis Forge Ahead with New Digital Carbon Credit Technology • AXTG • Apr 24, 2024 3:00 AM
North Bay Resources Announces Successful Equipment Test at Bishop Gold Mill, Inyo County, California • NBRI • Apr 23, 2024 9:41 AM
Epazz, Inc.: CryObo, Inc. solar Bitcoin operations will issue tokens • EPAZ • Apr 23, 2024 9:20 AM