Square case study

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MGT 498

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Marketing

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Feb 20, 2024

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Executive Summary Square is a company that revolutionized the way small and medium businesses conduct point of sale (POS). There was a time were Square ran a promotion that allowed the end user the ability to process a certain amount of payments for free. Square’s free dongle coupled with the promotion allowed sole proprietors the ability to not have to think about how payment processing with vague fee structures. Issues and Opportunities A large issue that Square presents is personal data and identifying information. Going to a restaurant swiping your card and signing is great. Having the option to have a paperless receipt, would likely get lost; even better. The POS texted your phone the receipt… how did they get your phone number? Does square recognize your first and last name and the last 4 digits of any debit or credit card that you ever owned? Thinking about data breaches is an issue with any company that holds bank/ card information and personally-identifying information. Mirino (2019) stated: Much of today’s uncertainty in this area stems from the challenges those actors have faced in adapting a core principle of information privacy law—namely, what has been dubbed “personal data,” “personal information,” or “personally identifying information (‘PII’)”—to contemporary life. Because it is the “personal “quality of certain types of information that springs consumer rights, a clear definition of what counts as “personal” is crucial to any law in this sphere (p. 178).
Square being birthed as a solution for small and medium-sized businesses also creates an opportunity for personal financial transactions. Square owns Square Cash (Cashapp), which allows individuals to send amounts from $250-$7,500 per week. Assumptions We can assume that Square, now named Block, has already considered the future of financial currency. This will impact how individuals will pay for goods and services and how businesses will need to receive them. If Square didn’t think about this looming change of blockchain and digital currency it would be right back in situations that caused the company to get created. “Square Inc. is changing its corporate name to Block Inc., signaling a push beyond the company’s main sales and payments products into businesses like music, cash transfers, and the blockchain” (Wagner 2021). Blockchain does offer more security and privacy during a transaction. Alternatives Square will be bringing blockchain accessibility to everyone’s pocket in the coming years. Merchants and consumers alike will be equipped with the ability to make transactions that will further increase the needs of banks. Square could direct this momentum and get into lending products such as loans or even mortgages. Square already has data and infrastructure to support loans. “Applications for a mortgage fell for the third week in a row and now sit at a 28-year low for the second-straight week, according to data released Wednesday” (Bahney 2023). A CNN headline from a few weeks ago speaks about the decline in mortgage applications. Square can solve this by producing loans in an unconventional way which would create a “credit union”
system that allows users who can show a certain amount of deposits in their account each month a preapproval letter. A business loan is a product that is in high demand with the surge of small businesses being created. Square Loans, a subsidiary of Square (Block) gave over $4B funded for 2022. Square’s products and services are made to take the worry out of the business owner’s life. Staff 2023 stated: Square Loans typically approves merchants for less than 20% of a merchant’s expected annual Square gross payment volume, is repaid by withholding a percentage of credit card sales, and enjoys a borrower base that pays off its loans in less than 9 months on average. The creator of Square’s goal is to solve the problems of small and medium-sized businesses. These are the companies that may not have resources or access to capital. “ McKelvey quickly recognized that the problem he faced that day was common to small and medium-size businesses (SMBs) everywhere” (Kotler 2022). Recommendations The recommendation is that Square continue to improve encryption to improve the safety of user data. Square(Block) understands that transactions have moved well beyond the paper currency(cash or checks) and is taking a step to get ahead of the financial advancements. Square(Block) should capitalize on their loan products and servicing mortgages
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References Bahney, A. (2023, March 2). Mortgage applications drop to 28-year low as rates climb . CNN. Retrieved March 27, 2023, from https://www.cnn.com/2023/03/01/homes/mortgage- applications-march-1/index.html Kotler, P., & Armstrong, G. (2020). Principles of Marketing (18th ed.). Pearson Education (US). https://reader2.yuzu.com/books/9780136646013 MIRINO, K. (2019). It’s Nothing Personal: Why Existing State Laws on Point-Of-Sale Consumer Data Collection Should Be Replaced with a Federal. St. John’s Law Review, 93(1), 177–200. Staff, deB. (2023, February 26). Square Loans Completes Monster Funding Year. deBanked. Retrieved March 23, 2023, from https://debanked.com/2023/02/square-loans-completes-monster- funding-year/ Wagner, K. (2021, December 1). Jack Dorsey's square (SQ) changes name to block . Bloomberg.com. Retrieved March 26, 2023, from https://www.bloomberg.com/news/articles/2021-12-01/dorsey-s-square-changes-name-to- block-in-nod-to-new-businesses? utm_source=website&utm_medium=share&utm_campaign=copy

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