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Why Square's CashApp is its real driving force

Assif Shameen
Assif Shameen12/13/2019 7:0 AM GMT+08  • 9 min read
Why Square's CashApp is its real driving force
(Dec 13): Earlier this month, Jack Dorsey, co-founder and CEO of financial technology, or fintech, giant Square triggered quite a kerfuffle when he announced that he would take three to six months’ leave travelling across Africa next year. Dorsey, who r
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(Dec 13): Earlier this month, Jack Dorsey, co-founder and CEO of financial technology, or fintech, giant Square triggered quite a kerfuffle when he announced that he would take three to six months’ leave travelling across Africa next year. Dorsey, who recently spent time in Nigeria, Ethiopia and Ghana, is also CEO of social network Twitter and the only person who runs two listed tech companies. Shares in both firms plummeted as talking heads and corporate governance experts took to financial media, and even Twitter, to voice their concerns. Although the two stocks have since rebounded, the episode inadvertently highlighted Square’s long-term potential as a huge disruptor in emerging markets from Africa to Latin America to Asia, where financial infrastructure is less developed even though the bulk of the firm’s revenues currently come from the US.

Founded by Twitter’s co-founder and CEO Dorsey and Jim McKelvey at the height of the global financial crisis in early 2009, San Francisco-based Square now has a market capitalisation of US$29 billion ($39.4 billion). The company started out peddling a small squarish card-reader that plugs into a smartphone or tablet, giving small merchants an easy way to accept credit and debit cards. Its market value is now twice that of troubled German financial behemoth Deutsche Bank and slightly bigger than that of State Street Corp, which owns the 14th-largest bank in the US and is the world’s largest custodian.

Having caught traditional payment-processing companies off-guard, Square has since expanded into a major fintech firm with a cohesive commerce ecosystem that helps sellers start, run and grow their businesses, Dan Dolev, payments analyst for Macquarie Securities in New York, tells The Edge Singapore in a recent interview. Essentially, Square combines sophisticated software with affordable hardware, which enables payment solutions for sellers, including point-of-sale hardware and software. Now, it is using its Cash App to transform itself as a real payments disrupter.

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