4 ms·

You are correct. I mis-spoke. I should have said "profitability models" not revenue models. Now, you seem to have interpreted that statement correctly anyway

by gsibble 14y ago

You are correct. I mis-spoke. I should have said "profitability models" not revenue models. Now, you seem to have interpreted that statement correctly anyways. So do you have any evidence whatsoever that Square "makes money" (ie. turns a profit) from "every single user"?

qq66 14y ago
I would consider "using" Square to be making a transaction through Square. Square takes 2.75% of that transaction regardless of its size. So yes, Square makes money from every user.
- ssebro 14y ago
  His point is that he thinks that many people with the square card reader never read any cards. He's right - unless there's a government subsidy that I don't know about, Square does not make money from every user.
  - gsibble 14y ago
    I appreciate the help, but that's not actually my point. My point is that Square does not keep the 2.75%. It is doled out as cost of goods sold in the form of interchange fees back to card networks and issuing banks. No one has any idea how little of that fee that Square keeps but I would guess around 0.2 - 0.5% at most.
- gsibble 14y ago
  And do you know the breakdown of that 2.75%? Most of it does not go to Square, it goes to card processing networks and issuing banks. Do you know what those are?
ErikHuisman 14y ago
Also in your "leaked slide" where "they're burning cash at an enormous rate" one can clearly see that revenues exceeds costs. ie. making money?!
- gsibble 14y ago
  Do you have any idea how to read a chart? Do you see that "operating loss" light red colored area there? If the slide is to be believed, the aggregate cost of Square's transactional fees (the orange part) and their operating costs (the dark red part) is higher than their revenue (the blue part). That means they are operating at a loss of about $150k per day as of April of 2012. And it's accelerating. Feel free to correct me if I am wrong. As for the source, the slide was on TC and the report is available with a subscription at https://intelligence.businessinsider.com/welcome https://intelligence.businessinsider.com/welcome. I can't verify it, but everything I have seen/know about their revenue model makes it look genuine.

by gsibble 14y ago

qq66 14y ago

I would consider "using" Square to be making a transaction through Square. Square takes 2.75% of that transaction regardless of its size. So yes, Square makes money from every user.

ssebro 14y ago
His point is that he thinks that many people with the square card reader never read any cards. He's right - unless there's a government subsidy that I don't know about, Square does not make money from every user.
- gsibble 14y ago
  I appreciate the help, but that's not actually my point. My point is that Square does not keep the 2.75%. It is doled out as cost of goods sold in the form of interchange fees back to card networks and issuing banks. No one has any idea how little of that fee that Square keeps but I would guess around 0.2 - 0.5% at most.
gsibble 14y ago
And do you know the breakdown of that 2.75%? Most of it does not go to Square, it goes to card processing networks and issuing banks. Do you know what those are?

ErikHuisman 14y ago

Also in your "leaked slide" where "they're burning cash at an enormous rate" one can clearly see that revenues exceeds costs. ie. making money?!

gsibble 14y ago
Do you have any idea how to read a chart? Do you see that "operating loss" light red colored area there? If the slide is to be believed, the aggregate cost of Square's transactional fees (the orange part) and their operating costs (the dark red part) is higher than their revenue (the blue part). That means they are operating at a loss of about $150k per day as of April of 2012. And it's accelerating. Feel free to correct me if I am wrong. As for the source, the slide was on TC and the report is available with a subscription at https://intelligence.businessinsider.com/welcome https://intelligence.businessinsider.com/welcome. I can't verify it, but everything I have seen/know about their revenue model makes it look genuine.