Earnings Reports

Google Ad

Digital payments and point of sales processor (POS) Square launched its new dedicated payroll app on Tuesday sending $SQ flying over 9%. Square has been leveraging its data to great affect. Competitors $ADP and $PAYX shares were down on the day.

Square Digital Point of Sale

Square's new, dedicated payroll app will allow employers to approve time cards and pay employees at the point of sale on their digital terminal. The company has seen it's merchant services such as payroll contribute more and more to the company's strong growth. Square has been successful in adding fee based additional services beyond payment processing, including instant access to funds and invoicing. The new app puts the payroll service in a dedicated place. 

Market Reaction 

Square Inc NYSE: SQ  $94.02 ▲ $7.96 (9.25%)

Automatic Data Processing Inc NASDAQ: ADP $148.13 ▼ $0.97 (0.65%)

Paychex Inc NASDAQ: PAYX $73.39 ▼ $1.17 (1.57%)

Square Payroll App

$SQ is up 240% over the past 12 months, while S&P 500 $SPX is up in the same period 17%.

CFO Sarah Friar last week explained how $SQ  leverages small business data to make transactions more seamless in an interview with CNBC's Jim Cramer.

Square spoke about leveraging its food-ordering subsidiary, Caviar. Friar said. "What we want to make sure [of] with Caviar and with the broader Square platform ... as we integrate it into things like Square for Restaurants, [is] that a restaurant can now fully serve their customer regardless of where the customer shows up."

Friar said that Square would use its connection to the client to build omnichannel capabilities. "Our strategy there is to be a food-ordering platform. So it's different from the delivery companies," she said.

Because Square already works with most of the small businesses on Caviar, it can use its powers of integration to ensure that restaurants are able to meet in-house, take-out and delivery demands.

Friar said efficiency is "all about the cohesiveness of the system." "We know the data of your business, so with that, we're able tto do things like underwrite you for Square Capital to facilitate a loan," she said. "Elsewhere in the system, we can take something like time cards, so where someone's clocking in and clocking out, and then we can automate the payroll. So everything we do is about, how do we save that business time?"

The CFO said. "No one else has pulled it all together. Others talk about integrated this and integrated that, but there's no integration if it's actually built seamlessly from the get-go," she told Cramer. Friar also spoke at Recode's annual Code Commerce conference in New York about her vision for her company's peer-to-peer payment app.

Other parts of the 'Square include' Square Register, their first all-in-one hardware offering. Their open platform strategy sees using business systems that are integrated with Square. Virtual Terminal was built with their E-Commerce API was their fastest product to reach $1 billion in cumulative GPV.

About Virtual Terminal

Virtual Terminal allows sellers to key in payments from a web browser. This shift in product context away from a mobile device is subtle on the surface, but significant for sellers that run their businesses on a computer where companion tools such as email, customer lists, and scheduling operate alongside Virtual Terminal. Nearly 75% of Virtual Terminal GPV comes from sellers that use the product as their primary way to process payments with Square. Virtual Terminal also continues to attract new sellers: To date, approximately half of the product’s GPV comes from sellers that are new to the Square ecosystem. 

Source: Square Inc https://squareup.com/about/investors

Log in to comment
Discuss this article in the forums (3 replies).