Square Payment Pace Rises 25% in Niche Coveted by EBay

By Danielle Kucera -

Wed Apr 25 16:00:00 GMT 2012

Square Inc., maker of credit-card readers for smartphones and tablets, has increased its payment volume 25 percent since March, when EBay Inc. (EBAY)'s PayPal showed off a new mobile scanner and underscored growth in the field.

Square, founded in 2009, is processing transactions at an annualized rate of $5 billion, up from $4 billion a month ago, as more consumers embrace mobile payments, Chief Operating Officer Keith Rabois said in an interview. The San Francisco company is making cash from sales before 5 p.m. on any day available in merchants' accounts on the next business day, compared with as many as five days out for other processors.

The market may top $170 billion in transactions by 2015, up from about $60 billion last year, according to Juniper Research Ltd. Square's rivals include Intuit Inc. and Paypal, which has said its mobile-payment volume will jump 75 percent this year to $7 billion. To lure merchants, Square is speeding access to funds.

"Sole proprietors and small businesses live and die by their cash flow," Rabois said in an interview. "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."

Square, which is closely held, was created by Jack Dorsey, the co-founder of Twitter Inc. Investors in Square include Sequoia Capital and Khosla Ventures.

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