

Can Square make money with its new pricing? - seanharper
http://www.quora.com/Can-Square-make-money-with-its-new-pricing

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URSpider94
I doubt that Square is too worried about whether they can make money today
with their pricing. Their #1 goal has to be to get big enough, quickly enough
that they can fight off the inevitable competition from other payment
gateways, and also to reach the scale where they can negotiate better deals
for themselves.

If they don't price aggressively now, then lack of profitability today will be
the least of their problems.

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fightingmonk
Sure they can. Their cash flow model differs from other merchant service
processors. Square holds potentially thousands of dollars for 30 days before
delivery to the account holder. Every moment of that time they're earning
interest. It's called playing the float, and some players in the space make
most of their money on float interest.

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dhyasama
Actually, if a merchant is "on reserve" and having their funds held, then the
processor is required to keep the money in a non-interest bearing account.
They don't make money on it. Reserves are to cover the processor's ass on
chargebacks.

