payments
Square Goes Back To The Drawing Board, Ahead of First Earnings
February 19, 2016
Square is bracing for its first milestone as a public company – its first earnings report.
On March 9th, the payments company will present a scorecard of how it’s doing and what that means for its investors. Visa picking up a 10 percent stake in the company came as a respite for the stock which has generated close to 27 percent losses since its IPO.
But that might not be enough to prove that the seven year old company is in a sustainable business. Square has to prove that it is all a small business needs. From capital, payroll to point-of-sale, Square wants to be the one stop shop for small merchants, not relying entirely on its payments business which makes up 95 percent of its revenue.
When the company started in 2009, its strategy was to go after micro merchants that were too fragmented and small for bigger payments companies. Square started by giving these merchants a dongle to accept card payments for a flat fee. While the idea was to serve an untapped market, the company could not be shielded from the risks that these merchants bring to a business with their heterogeneity, fragmentation and smaller deals.
But ahead of its first earnings call, the company is ramping up its efforts towards bringing more businesses into its fold. Forbes reported that Square expanded its payroll product to merchants in Tennessee, New Hampshire, Nevada, South Dakota, and Alaska in addition to the existing markets of California, Texas and Florida allowing them to serve 30 percent of independent businesses in the U.S.
Transaction Successful: Visa Buys 10% Stake in Square
February 12, 2016
Visa just bought a 10 percent stake Jack Dorsey’s payment company, Square.
The payments network revealed an SEC filing announcing its 9.99 percent stake in the company and Square’s stock jumped 11 percent at market opening. Visa seemingly upped its stake, from the previously undisclosed investment it made in the company in 2011, according to CNNMoney. The deal makes Visa the fourth-largest investor in Square following Jack Dorsey himself, venture capital firm Khosla Ventures and major mutual fund, Capital Research and Management.
Square was started in 2009 as a point of sale solution for merchants. It turned heads with $10 million in Series A funding from Khosla Ventures and Marissa Meyer at a $40 million valuation. Since then the company has diversified into p2p payments with Square Cash and Square Capital, offering merchant cash advances to small business merchants.
The company went public in November 2015 and debuted on NYSE with a 30 percent discount, pricing its share at $9.
As it tries to gain a foothold in the competitive payments space, this fresh infusion of capital comes as good news for the stock which has generated close to 27 percent losses since its IPO.
OMG: Same Day ACH
September 25, 2015
Coming soon, the ability to ACH funds same-day will finally exist. The change will be a boon to tech-based lenders that have become famous (or infamous) for their ability to approve and issue loans quickly. No matter how fast the systems have become however, the ACH network has continued to slow the process down.
Next-day funding has long made borrowers skeptical about the online lenders they apply to and many applicants become anxious when they hear that the funds will be in their account tomorrow rather than today, after the deal has been closed.
Speaking from my own experience, there was almost nothing worse than telling a merchant that the funds had gone out and would be in their account the next day because they would disregard the last part of that statement and check their bank accounts immediately and of course would not see those funds. They’d immediately reach back out to me or the underwriter and say that they had been deceived because no money was there. This scenario played out on at least half of all the deals I ever worked on and it was awful.
And I’d remind them, “It’s an ACH. It’s overnight. It should be there in the morning depending on your bank. If for whatever reason it isn’t, give me a call.”
Even after repeating myself, I’d often get an email later that day at 6 pm (bank closing time) to say that they were at the bank and the teller has just told them that they don’t see any incoming wires.
So many merchants just could not believe that a tech-based funding company could not make the money appear instantly in their account and every passing second caused them more anxiety and fear that they had been tricked.
Enter Same Day ACH, which is slated to launch in September 2016. According to the National Automated Clearing House Association (NACHA), who governs the ACH network, there will be two settlement times.
A morning submission deadline at 10:30 AM ET, with settlement occurring at 1:00 PM.
An afternoon submission deadline at 3:00 PM ET, with settlement occurring at 5:00 PM.
Virtually all types of ACH payments, including both credits and debits, would be eligible for same-day processing, according to their announcement.
The industry can’t get Same Day ACH fast enough!
And if you thought you were excited about ACHing, just watch the below video produced by NACHA about how awesome their network is.
Announcement: Dwolla partnership U.S. Treasury
February 19, 2015Company Announcement
Dwolla to help U.S. Treasury go paperless, prepare for a secure digital future
Each year the The U.S. Department of the Treasury’s Bureau of the Fiscal Service collects 400 million transactions worth $3.7 trillion. Ensuring that its collection programs stay relevant, safe, and cost-effective, they recently launched a new Digital Wallet program. The new initiative aims to modernize the way our country collects and distributes payments through the convenient offering of safe and innovative payment options. In June of 2013, the Digital Wallet initiative issued a request for proposal, asking national payment platforms to help the 225-year-old Treasury Department improve its flagship revenue collections product, Pay.Gov.
With existing partnerships with Microsoft Government and state administrations, Dwolla’s flexible architecture makes for an ideal partner in helping modernize public payments. Today, we’re excited to announce our selection as the U.S. Treasury’s first Digital Wallet partners, alongside PayPal (and ApplePay).
What is Pay.Gov? It’s smart government.
Nearly 200 federal agencies, ranging from the Department of Interior to the Department of Defense, use the U.S. Treasury’s Pay.gov platform to create and host custom online payment forms, collecting over 100 million transactions worth approximately $110 billion per year. These simple forms, which hide a sophisticated software and accounting system, allow federal agencies to collect and track non-income tax payments for things like climbing Denali or court fees. It’s a lot like Dwolla Forms, but made exclusively for the federal government.
By outsourcing their revenue collection needs to Pay.Gov, federal agencies not only provide taxpayers an improved experience but also streamline their own payment operations. In doing this, they reduce the operational costs, inefficiencies, and foregone payments. Simply put, Pay.Gov increases revenue for agencies and saves taxpayers money.
How is Dwolla involved? How would this impact me?
Dwolla is now a live payment option for many US agencies (and this will grow over time)–allowing any taxpayer with a U.S. bank or credit union account to use Dwolla’s simple and secure online checkout experience to pay for a whole host of federal fees, products, and permits.
No cards. No checks. No pre-existing Dwolla account required. No sharing of sensitive payment information with the federal government.
What is Dwolla? A secure and modern way to make bank transfers.
When we began building the Dwolla payment network in 2008, we set out to create the ideal way to send money. What we quickly found is that the ideal way to move money has changed since the 1960s and 70s, and the only way to solve the problem was to start over.
Starting fresh with over 40 years of technological advancements, Dwolla was able to create an end-to-end payment network that modernized the legacy bank systems—making it easier to use, more accessible, and more secure. Today, we work with anyone or anything connected to the Internet, from solopreneurs to publicly traded companies, exchange infrastructures to software developers, state governments to financial institutions. We help our community rethink their payment operations, product offerings, and user experiences.
Create new standards in security and privacy: Dwolla has baked new technologies into its network, like authentication and tokenization, that eliminate sensitive financial information from a typical transaction.
Solve problems for all: Free turnkey products, like MassPay or Dwolla Forms, make it easy for anyone to send or receive funds without any existing technical know-how, while a healthy library of developer docs and APIs make it easy to plug Dwolla into nearly any platform, existing operation, or your own creation. Additional levels of support and customization are available and affordable.
Create a powerful, but flexible infrastructure: A simple, and dynamic platform, Dwolla was designed to handle the unique considerations of governments.
Create a platform for future innovation: Whether its mobile applications, real-time payments, or tokenization, Dwolla benefits are freely accessible via our API and developer documentation, allowing the network to scale and solve for the unique needs of an evolving payment landscape.
So what Dwolla can do for you? Grab a brochure from Dwolla.com/government or sign up for our upcoming webinar by emailing government@dwolla.com.
