Square, a new mobile payment system has finished the fourth round of raising funds for expanding the company’s operations. Founded by Twitter co-founder Jack Dorsey, the company raised $200 Million in the round.
Square has amassed a total of $337 Million to fund its operations first in the US and then internationally. The total valuation of the company has surged past $3 Billion mark, according to the line publication AllThingsD. The company claims that this much amount will help it to move across the border to other regions in the world.
Square builds software and equipment for electronic transaction from mobile devices. Everyone has heard the names Google Wallet and near-field communications (NFC) that have been generating a lot of press these days.
Square makes its own equipment like Google Wallet and all the credit cards and debit cards data are stored in one app that furthermore assists in swift point-of-sale transactions. In addition to software, the company also makes devices for point-of-sale counters/registers and dongles that can be attached to mobile devices via headphone jacks.
Big companies like Apple. Starbucks, Wal-mart Stores, Best Buy, FedEx, Walgreen and Staples are already using Square at their retail stores. The company accepts Visa, MasterCard, American Express and Discover cards.
“Based on the company’s flat 2.75% transaction fee, we estimate Square’s gross revenue at $170 million, and our understanding is that the company is not yet EBITDA (earnings before interest, taxes, depreciation and amortization)-positive,” said Jefferies analyst Jason Kupferberg in a recent report.
Up until now, NFC has been a very important part of the electronic transaction process. However, the company claims that in the coming years NFC will not be need for such processes.
“Pay with Square shows that NFC may not be needed in a connected world,” said Macquarie analyst David Gibson in a Sept. 6 report.
The likes of Wal-Mart and Target are also in the process of developing their own electronic transaction systems with the help from Verizon Communications and AT&T. Sprint is coupling with Google to enhance their system.