24. Jack Dorsey, CEO, Square - Most Powerful People in Wireless
What makes him powerful: Now more than ever, it's hip to be Square. Three years after Twitter creator Jack Dorsey built the first prototype of a mobile reader device enabling users to accept credit and debit card transactions via smartphone, Square is at the forefront of the mobile commerce revolution: The firm now supports more than 2 million merchants across the U.S. and processes more than more than $8 billion in payments on an annualized basis, up from $1 billion just 12 months ago. Its inevitable expansion into the international market is officially underway, with services migrating north to the Canadian market in late October. And in September, Square closed a $200 million Series D financing round led by investors including Citi Ventures and Rizvi Traverse Management, increasing the company overall value to $3.25 billion.
But Square's business is only just beginning to percolate. This month, Dorsey and his team are making the leap from the small business segment into the Fortune 500 as coffeehouse giant Starbucks abandons its existing point-of-sale terminals in favor of Square services. Starbucks CEO Howard Schultz, now a member of Square's board of directors, explained the new partnership will significantly reduce his company's payment processing fees--while Square has historically charged a flat fee of 2.75 percent on all transactions, Dorsey has so far deflected questions on whether the same transaction rate will apply to Starbucks, saying only "As you scale up you do see reductions in cost, and Starbucks is a very significant scale compared to a lot of other merchants in the world." Look for businesses of all shapes and sizes to pay very close attention to the partnership's evolution in the months ahead.
Despite its recent growth and potential for even greater success, Square's continued dominance of the mobile payments segment is far from guaranteed, however. Dorsey's innovations have spawned a legion of imitators, most notably PayPal Here, a triangle-shaped dongle that launched in March 2012 and signed up more than 200,000 merchants within its first month of availability. PayPal Here charges merchants a flat rate of 2.7 percent per transaction, a .05 percent savings compared to Square's offering. There's also Intuit's GoPayment, which integrates with the company's QuickBooks Point of Sale tracking and management suite, as well as the fledgling GrouponPayments, which claims just 1.8 percent plus $0.15 of each MasterCard, Visa and Discover transaction and 3 percent/$0.15 of each American Express transaction. Even Amazon is poised to enter the space, according to reports.
That means Square must continue to break new ground to stay ahead of the competition. So far, so good: In June, the company updated its hands-free Pay with Square app (available for Apple's [NASDAQ:AAPL] iOS and Google's [NASDAQ:GOOG] Android) as well as its Square Register for iPad point-of-sale app with customizable customer rewards features designed to eliminate conventional loyalty programs like punch cards, simplifying life for merchants and consumers alike. Square has also introduced flat-rate pricing options enabling merchants who process up to $250,000 per year to pay a monthly fee of $275. It's no wonder so many Silicon Valley insiders are projecting Dorsey as the next great entrepreneurial icon--with Twitter, he transformed the way we communicate, and with Square, he's transforming the way we do business. Few people change the world once, let alone twice.--Jason
- 2424. Jack Dorsey, CEO, Square - Most Powerful People in Wireless