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Deep Dive: Square

  • Square is one of the seminal financial services companies of this generation.
  • Here's a deep dive into Square's products, business, and company.

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Deep Dive: Square


San Francisco based Square is a commerce ecosystem which offers merchant aggregator services and payment processing solutions. It boasts a line of software and hardware products that enable sellers to grow and manage their businesses. Its offerings include consumer and business friendly Cash App, online store, Square Payroll and Square Point of Sale. Square was founded in 2009 by Jack Dorsey and Jim McKelvey. It currently has offices in the U.S, Canada, Japan, Australia, UK, Ireland and Spain. As of December 2019, it has more than 3,800 employees. 

Square Ecosystems

Square hosts two digital payment ecosystems, namely its Seller and Cash App ecosystems. 

The Seller ecosystem provides merchants with a wide variety of financial products from credit card processing to point of sale solutions for building and retaining their businesses. Square’s products range from its hardware to its subscriptions and services such as Square Capital, Square Payroll and the Square Card among others.

Square’s Cash App ecosystem caters to consumers and businesses through its digital wallet that supports P2P payments. Aside from its peer to peer payment capabilities, the app allows consumers to receive their paychecks, direct deposits and tax returns. It also provides a platform for stock and bitcoin investments. Cash App users can request a free Visa certified debit card called Cash Ccard which can be used with Boosts, oror discounts at retail stores for Square users, and ATMs. Cash App generates its revenue by charging consumers and businesses transaction fees. For consumers standard transfers between users are free while instant transfers incur a 1.5 % fee. Customers that use a credit card to make a payment on Cash App also incur a 3% fee. Businesses are charged when they accept Cash App payments at 2.75% per transaction.


Aside from its popular Cash App, Square offers a wide range of holistic business solutions that allow merchants to launch and run each segment of their business with an integrated network of financial products and services. Square provides an immersive business tool kit that incorporates selling online and in person through the online store, virtual terminal, check out links, contactless payments, point of sale solutions, pick up and delivery options, business loans and cash flow tools. 


Square provides point of sale hardware such as the Square card reader, the Square Terminal and the Square Register. Hardware revenue for Square in the third quarter of 2020 was $27 million.


Square’s software includes offerings such as its point of sale solutions that integrate payments, items, inventory, ecommerce and CRM. Additional services include the Square Online Store which allows businesses to launch their own ecommerce platform. Square Retail helps retail stores sell their products both online and physically through integrated payments, inventory, financial and customer relations management. Square Appointments provides sellers with a customer booking and scheduling platform which can be aligned with the Square Online Store to provide a more unified user experience.

square ecosystems
Source: Square

Square’s two digital ecosystems. Seller supports managed payments and point of sale solutions through Square’s virtual terminal, Square Capital, Square Appointments, Square Payroll, customer engagement, invoices, Square online store, Square Card, Square’s developer API, Square for restaurants and Square for retail. 


Cash App supports peer to peer payments through the Cash Card, direct deposits, bitcoin and stocks.

square cash app ecosystem
Source: Square

Square’s Cash App has experienced major strides in growth during the third quarter of 2020 with a 212% year over year increase of $385 million gross profit. The ecosystem boasts 30 million active monthly users with an average of 15 transactions per month. Q3 2020 saw a 50% year over year increase with 7 million Cash Card activations. Investment benefits include Cash App’s expansion with Cash Card and bitcoin functionality, its positive gross profit retention and its low customer acquisition costs.

square seller ecosystem
Source: Square

Seller’s major plus points include its 12% increase in gross profit during Q3 2020 with $409 million. The platform’s integrated end to end design in addition to its omni-channel capabilities, open platform and scalable distribution contributes to the ecosystem’s popularity among sellers. Seller’s high brand loyalty in the form of its net promoter score of 63 is double the average of banking service providers.

Square Capital

Square Capital provides small businesses loans ranging from $300 - $100,000. Loan eligibility is determined through Square processing volume, payment frequency, a customer base of returning and new customers and the growth capabilities of a business. 

Recent Mergers and Acquisitions

  • Credit Karma Tax
  • Weebly
  • Stitch Labs
  • Verse
  • Dessa
  • Eloquent Labs
  • Zesty
  • Entrees On Trays


In Q3 of 2020, Square’s gross profit grew 59% year over year to $794 million. Its Cash App ecosystem delivered a gross profit growth of 212% year over year to $385 million. Cash App generated $1.63 billion of bitcoin revenue and $32 million of bitcoin gross profit during the third quarter of 2020. Square’s Seller ecosystem generated gross profit of $409 million, up 12% year over year. In markets outside the U.S., Seller GPV grew 46% year over year in the third quarter of 2020, and represented 11% of total Seller GPV.


Square is a digital payment processing player with competitors from the payment processing sector that cater to businesses and consumers.

  • PayPal 
  • Intuit
  • Shopify
  • Stripe
  • Clover
  • Zelle


Square’s customer base includes small, medium and large sized businesses. Square’s sellers represent businesses in a diverse set of industries, including retail, services, food, and leisure. Square’s Cash App is available for businesses and consumers alike. More than 10 percent of the U.S. population has downloaded Square’s Cash App. 


In 2020, Square’s employees were 41% women and 21% underrepresented racial and ethnic minorities (URM) according to its Inclusion and Diversity blog. These figures have grown 4.9%  and 9.3%, respectively, year over year, but are still short of their U.S.Census benchmark target of 50% women and 30% URM. 0.4% of Square’s employees in 2020 were non-binary. 

Tearsheet Coverage

  • Square’s David Rusenko discusses the effect of COVID-19 on Square’s ecommerce plans.
  • Square’s David Rusenko on the relaunch of Online Store.
  • Data Snacks: Square’s Cash App user, card spending growth.
  • Square’s Cash App continues to scale the bitcoin hype wall.
  • Square’s Carl Perry on the new Orders API and the direction of the Developers Platform.
  • WTF is Square Cash?
  • Square Cash app is accelerating growth, outpacing Venmo

Square Leadership

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