Specialist
Former Strategic Executive at Square Inc
Agenda
- Square’s (NYSE: SQ) operating environment and impact of the global pandemic and economic recession on digital transformation
- Potential performance in Square’s Seller business, including the risk of a more protracted recovery on the company's small-merchant base
- Growth of Square’s Cash App and ability to take market share from traditional checking accounts with banks while potentially adding platform services
- Outlook for H2 2020 and beyond – potential transaction volume trends
Questions
1.
What key trends or drivers should we be monitoring as it relates to Square and the company’s current operating environment?
2.
Do you think Square will be successful at moving upmarket into enterprise customers and expanding internationally? Pre-coronavirus, there was a lot of discussion around its ability to execute on these fronts.
3.
What other efforts might be necessary for Square to move beyond SMBs, particularly in relation to sales and marketing? How should we evaluate the ROI of sales and marketing spend for SMB vs enterprise?
4.
Do you think Square’s recent acquisition of commerce management platform Stitch Labs will help it move further upmarket or into more complex retail?
5.
How do you assess Square’s acquisition of Weebly, and Square’s more holistic omnichannel digital payments capabilities? Could it move to challenge players such as Adyen or Stripe on quality of offering?
6.
Do you think Square has faced any POS competition from iZettle in the US?
7.
What is stopping traditional players with a POS foothold – such as Ingenico or Verifone – from building a more significant online presence or competing more with Square?
8.
How do you envisage the adoption curve or penetration rate for non-payment services for merchants, given the current low adoption rates? How should we evaluate the monetisation models of platform services or data they could offer?
9.
How would you grade Square’s Cash App offering vs other more traditional P2P-type transfer companies such as Venmo, and digital banking options such as Chime, Varo, N26 or Monzo?
10.
How do you expect Square to further monetise the Cash App platform? It offers Bitcoin and stock trading, and there is talk around a credit card or bill pay and spend management – you also alluded to consumer finance. What areas would you identify as having real revenue or earning potential?
11.
Might customers naturally age out of banking products such as Cash App or neobanks and eventually need to go to a traditional bank? You loosely referenced 30-something million weekly or daily active users. How can we split this by material, active users that drive enough interchange to have a quality LTV, vs users who have downloaded the site and used it a few times?
12.
Do you think Square faces any competition from Green Dot on the Cash App or the card side?
13.
Square received approval to potentially launch a bank subsidiary in 2021. What are your thoughts on this, having referenced consumer finance as a potential monetisation opportunity? Do you think Cash App would consider lending through a balance sheet, or is there a revenue share with banks that underwrite the loans?
14.
An analyst recently indicated Square could potentially capture 20% of direct deposits someday. How do you think about the growth trajectory of the platform?
15.
What is your M&A outlook for Square over the next one, three and five years?
16.
Can we conclude with your outlook for Square, outlining anything you find the investment community commonly misunderstands about the company?
