Square announced yesterday that it is processing payments at a $5 billion a year run-rate. Just one month ago it was $4 billion a year, and we would expect it to keep rising. Square is currently used by about 1 million people to process transactions, a fraction of the potential market.
As we have discussed before, Square found the right go-to-market strategy based on backwards compatibility—taking advantage of the existing technology in the market: credit cards. What’s more, mobile payments is a scale business. We estimate that Square’s daily operating loss as a percentage of revenue fell from 39 per cent to 31 per cent over the past month.
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