Square Inc., the payments startup led by Jack Dorsey, released a 38-minute marketing video in advance of its planned initial public offering. Here are five highlights:
1) Untapped customer base: Of 30 million businesses in the U.S., 20 million don’t accept credits cards or other forms of electronic payments. Square sees this as its fuel for future growth. Square has 2 million merchants who processed $38 billion in annualized gross payments volume in the third quarter.
2) More than just payments: 12.5 percent of Square’s adjusted revenue (excluding Starbucks transactions) in the third quarter came from software and data -- a growing part of the business that the company says is key to becoming profitable. For instance, Square’s Dashboard, a real-time data analytics tool for merchants, was used on a daily basis by 70 percent of Square merchants, processing at least $125,000 in payments annually.
3) Big Data: Square sent 170 million receipts in first nine months of 2015, up 64 percent from the previous year. This real-time data lets Square sell merchants marketing services and insights into their businesses. The receipts can link a consumer’s payment information with their e-mail address and telephone number, which in turn makes it easier to boost customer engagement.
4) Low acquisition costs: About half of Square’s new merchants heard about the company through word-of-mouth, which keeps marketing costs low. And its hardware is sold in more than 35,000 retail locations in the U.S.
5) International growth: Square is expanding in Canada and Japan, which will be key to maintaining annual transaction growth forecasts of 20 percent to 25 percent.