How do you see Square faring in the future?

Amazon QrmM73
Jul 29, 2018 27 Comments

I know the stock is on fire for the last couple of years.
But, payments is a niche field and there are formidable competetiors like Stripe and Paypal operating in the same area.

So, can someone who has more knowledge of Payments comment on how they see Square faring in the coming years?

I have an offer from Square for a L5 SDE position with TC as 245k, so trying to understand if it is worth to switch from Amazon.

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TOP 27 Comments
  • Square / Other STAFF 😏
    Forget the other tech companies, the opportunity is the banks. Payments is Square's core but capital underwritting (non-FICO) and individual banking services (Cash App) are the other two $B businesses. Traditional banks have major legacy overhead, monetize their business with penalties, and have been poorly servicing their customers for decades. Also, Millennials are choosing to pay for experiences (CC payments) rather than houses/cars (ACH payments). Lastly, Stripe is fighting for empowered online retailers who can drive down margin due to economies of scale. Once start-ups grow they often leave Stripe's full-stack solution and piece together their own global payments solution.
    Jul 30, 2018 3
    • Stripe ufjP31
      In reality, it’s the exact opposite of this. This is a bit like saying that once start-ups grow they often leave AWS and piece together their own infrastructure.

      Instead large companies are increasing migrating *to* Stripe as they no longer want to manage their own pieced-together solutions and payments/compliance/risk people.
      Jul 31, 2018
    • Square / Other STAFF 😏
      Truth that enterprise and tech platforms want a managed service (and you might be right years after you go public), but you're also fighting for a market segmentation that drives down payment BPS margin for living. Both will be leaders in the market nonetheless.
      Jul 31, 2018
    • Square
      Fek

      Square

      BIO
      I'm Rick James bitch
      Fekmore
      Didn't Dropbox do exactly this? Grew up on s3 then gtfo once they got large enough?
      Aug 15, 2018
  • Square / Eng SQ
    Payments is definitely not a niche field. I think it's 2 trillion dollars a year that's still based around using paper in the US alone. There's still tremendous growth opportunities in the US. Then Canada, Europe, south America, Africa, Asia, etc. China will be hard because of WeChat.

    Stripe is competing primarily with online payment processing and PayPal is well... Just copying square to stay relevant.

    Square is different though because it now has a platform. You want to start an in person business? 5 minutes and you're set up to take any credit cards. Once your business grows we upsell you with payroll, marketing, dashboards, etc. You don't have to go to ADP or interface with any other vendors. We take care of it for you. Need a loan? We have Square capital. Your employees? We pay them next day with square cash, no need to wait for 2 weeks for a check.

    In this aspect, stripe and PayPal don't come close to being competition. With stripe you'll need developers to make your dashboards and talk to all the external systems.

    And square does have a developer API similar to stripe. We have the advantage of tying API payments right into your POS.

    Square continues to innovate while PayPal just copies. Stripe is solidifying what they're good at, but Square is quickly catching up to the API game. And when that happens, stripe really doesn't have anything on Square. It's easier to make an API/SDK than it is to make the platform Square has.

    Square still has amazing growth across multiple products. We're not just a POS. This is the reason the stock was so low until 2017 - people refused to see Square was anything more. And when they did, they saw the potential.
    Aug 1, 2018 3
    • Square / Other STAFF 😏
      Well said. Also, good luck trying to build a hardware business, competition.
      Aug 1, 2018
    • Amazon QrmM73
      OP
      That is very detailed. Thank you.
      Aug 1, 2018
    • Square / Eng SQ
      And now we're years ahead of PayPal with our new SDK launch announced today. Good luck trying to keep up with that.
      Aug 2, 2018
  • Square xYDF35
    Interested in why you think payments is a 'niche' field. It's a huge industry (Visa, MasterCard, PayPal etc).

    In my mind, payments are the core product / backbone of fintech. Other services can be layered on top of it, ie lending, payroll etc. Companies that started innovating in other areas have realized this (look at Kabbage).

    My view is that payments are less cyclical than most other tech, a lot of which is more discretionary in nature (is advertising). I think we're late in cycle, so would rather find a 'safer' spot for the next few years. I will say, it's probably not as safe as Amazon though.

    I think if you're looking for a place to get rich in a year or two, Square is probably not the place. If you're thinking Longer term, it makes sense.

    My guess is that your work life balance will be better.
    Jul 29, 2018 1
    • Amazon QrmM73
      OP
      Thanks for your insights.

      I would like to think that I am thinking long term.
      Personally, I like what Square is trying to in terms of serving folks that are not well served by the traditional finance industry, like foodTrucks, small vendors and young folks who don't have credit cards (through square cash).

      I am looking for a company where I can work for 4-5 years, and ideally even longer. I am trying to avoid a situation where I have to look for another job because the company is doing very poorly.

      I didn't understand what you meant by being late in the cycle though.
      Jul 29, 2018
  • I think they have a strong advantage in the sense that it's what average people think of regarding payments for a small business. Some of these businesses grow and drive more revenue.

    You sell stuff out of your garage or are starting a small business? You get a Square reader.

    They were asleep on the wheel for online though, that's where Stripe and PayPal are competitive (but for physical transactions they are king).
    Jul 29, 2018 0
  • Stripe is the competitor I’d be worried about. But Square used to have more competition for retail point of sale. Right now, not so much
    Jul 29, 2018 3
    • Amazon QrmM73
      OP
      Yea, Stripe seems to have started with API first, instead of POS, right?

      Where as Square started with POS.

      How likely is it that Square can get a foothold in the API sector, while Stripe is still operating there.
      I believe there can be multiple players present in this space, but not sure what Square's prospectives are.
      Jul 29, 2018
    • Stripe has started rolling out a POS now too
      Jul 29, 2018
    • Square
      Jurgjn

      Square

      PRE
      Facebook, Google
      Jurgjnmore
      Stripe does not have a POS. Stripe has solutions for card present POS, but they do not have a POS.
      Jul 29, 2018
  • Salesforce sZlm46
    Still undervalued. I’m high on Square.
    Jul 29, 2018 0
  • Yahoo Genius
    Yoe?
    If you're senior you may get refreshers if stock goes down badly (which I think will go down badly at some point so your RSUs will be worth nothing and TC will drop sharply).
    I still think AMZN has a better chance of a runup + if market crashes, it won't go down as bad as SQ.
    That said, SQ would be always a good acquisition so don't count on RSUs only.
    Jul 29, 2018 2
    • Amazon QrmM73
      OP
      6.
      Jul 29, 2018
    • Yahoo Genius
      Yeah not sure if you would get good refreshers if stock sinks. It's a risk to take.
      Jul 29, 2018
  • Microsoft Scrtsqrl
    Rising tide floats all boats
    Jul 29, 2018 1
    • Amazon QrmM73
      OP
      Fair point
      Jul 29, 2018
  • Square hDTF59
    Payments is a commodity business. Square is trying to monetize and grow its other services as quick as it can to give it multiple solid revenue streams. If successful, Square has a ton of upside. If not, the stock is massively overvalued for a payments company.
    Jul 30, 2018 0
  • Microsoft / Eng Tier 1
    I think Square is going to lose ultimately to Zelle in the consumer payments space.

    Square is doing very well in payment processing, and could potentially keep growing with additional services.

    I don’t see Square as being able to serve any markets other than small business.

    Great company. I think their stock may be overvalued.
    Jul 29, 2018 0
  • Is the offer in the Bay Area?
    Jul 29, 2018 1
    • Amazon QrmM73
      OP
      Seattle
      Jul 29, 2018
  • Amazon / Eng jNeo42
    So did you take the offer??
    Oct 4, 2018 0
  • MailChimp p82jfke
    Curious as well, it'd be interesting jumping to them if they'd have me. The fun times here aren't gonna last unfortunately.
    Jul 29, 2018 0