- Square’s fintech business model offers it multiple revenue streams.
- Square seems to be capitalizing on its many growth prospects on multiple fronts and growing the scope and offerings bundled into its current services.
- This Fintech leader is on a tear, competing not just with other fintechs in merchant services, and financial tools, but also with full service traditional banks.
Square Inc (NYSE: SQ) is a commerce ecosystem that enables its sellers accept card payments. Seller and Cash App make up the two key business segments. The company was founded in 2009 and is based in San Francisco, California. Co-founder Jack Dorsey remains the CEO.
To buy shares in Square from Australia, this is what to do.
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The two segments of Square are interdependent. Seller offers managed payment services, software and hardware solutions and financial products. Cash App has financial tools enabling individuals to spend, send and store money. It facilitates Cash Card transactions and stock and crypto investing. These enable sellers to accept payments in person by the swipe, dip or tap of a card or online using Square Invoices, Square Virtual Terminal and the seller's website. Hardware to facilitate commerce including contactless and chip readers, magstripe readers, Square Stand, Register, Terminal as well as third-party peripherals are an additional revenue stream for Square.
For 2020, Square reported a revenue of US$ 9.49 billion with a net income of US$ 213.1 million.
Square subsidiaries include Weebly, Square AU Pty Ltd and Square Capital LLC.
As a leader in the Fintech sector, Square stands to benefit from the immense popularity and growth in mobility and cloud computing.
COVID-19 has resulted in adding momentum to its merchant ecosystem as small and medium sized businesses began adjusting to business during the pandemic.
As for Cash App, Square appears to have aspirations that extend beyond digital-banking and money-management. It purchased a controlling stake in Tidal, a music-streaming service and plans to integrate Afterpay's buy-now pay-later to offer in-demand credit. It bought Credit Karma's tax-prep service and stock-investment tool. Bundled together, these services integrate Square into a full suite fulfilling the needs of modern banking consumers.
Compare the best online brokers on Finty.
Step 1: Select a broker to use
Find an online broker that allows you to invest in US-listed shares from Australia. There are many of them. When choosing a broker, there are several key characteristics to be aware of.
This feature is offered by many platforms with access to US markets. It is possible to save money on share trading by not having to pay commission. Both Stake or eToro are great options for Australians looking to buy US shares with commission-free.
Fractional share investment
Fractional share investment means that you can buy a portion of a share, rather than the entire thing. This may be worth considering as Square shares can be quite pricey.
User-friendly trading platform
It doesn't have to be difficult to trade shares. Keep an eye out for a platform that is simple to use.
Research, analysis, and reporting
A platform with a strong research and reporting section will be able to provide you with important information about Square such as company overview, price history and recommendations, and forecasts.
Step 2: Fund your account
Before your account activates fully, you may need to make the minimum deposit. There are many options available to fund your account with brokers.
It may take several days for funds to clear so that you are not able to trade immediately.
Step 3: Decide how big you want to invest
Many online brokers offer fractional share options, as mentioned previously. This might appeal to you if this is your first time investing in shares.
Fractional investing allows you to average down over time. This means that if the share price falls, you can trade your shares and enjoy a lower average cost with greater potential for gains.
Step 4: Purchase shares or an ETF
Many Exchange Traded Funds (ETFs) have exposure to Square including Cathie Wood’s ARK Fintech Innovation ETF, Vanguard Information Technology ETF, and Bitwise Crypto Industry Innovators ETF.
ETFs are similar to mutual funds but are more diverse. However, an ETF may be less appealing to active traders because of the lack of direct control over where investments are allocated.
Step 5: Choose your order type
There are many options for customizing the order you place. You can select which type of order you want and how much. These are the most popular order types.
Order to purchase/sell shares instantly. This ensures that the order is executed immediately, but does not guarantee the price.
Let's assume Square shares trade at US$255. The price of your purchase order drops to US $250 by the time it is executed. The price of your purchase will be lower. The same applies to price increases.
Execution-only orders for buy limit orders are executed at the nominal price or less. You may wish to buy Square shares at a price of US$250. You can submit a limit order for this amount. It will only be fulfilled if Square shares fall below US$250.
This type of order allows you to sell your shares at a certain price if the share price starts dropping. Let's suppose you want to sell your Square shares if the price falls to US$248 per share. Your stop limit order is executed if the shares drop to this price.
Another mechanism aimed at preventing you taking a hit on your shares if the price drops. You nominate a price at which you want to sell your Facebook shares - say US$245 per share. Your stop loss order will be executed if the price falls to that level but your order will be filled at the next available market price.
Step 6: Place your order
After you've chosen the type and quantity of order that you would like, you can move on to the next step. You will be able to achieve the desired outcome if you are familiar with all options available for controlling your order.
Step 7: Monitoring your investment
Buying shares is just one step. You must then keep track of what happens to your investment and watch how the share prices and the company performs. Here's how.
Monitor changes in Square’s share price and company performance
This is necessary whether you are buying shares for speculative purposes or to hold long term.
Square is certainly going to be making a lot of news once it begins to move beyond digital banking and money management.
Track industry trends and Square competitors
For Square’s Seller, with its free Point-of-Sale (POS) system and attendant services and peripherals, the top competitors include Clover, Lightspeed, Stripe, PayPal (NASDAQ: PYPL), Shopify (NASDAQ: SHOP), Loyverse, and Payment Depot. However, many of these do not offer the full, one stop shop services that Seller has now or will eventually offer, once known acquisitions are finalised.
Cash App competitors for Square include PayPal, Venmo, Zelle, Google Pay and Facebook Messenger.
Traditional banking giants are also moving into digital banking — Goldman Sachs with Marcus and JP Morgan Chase — taking on startups like Monzo and Starling as well as giant British lenders, HSBC, Barclays, Lloyds and NatWest.
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