Square passes one billion payments in only five years

The e-commerce payments company still has a lot of competition and a long way to go to reach PayPal

With all of the talk about ApplePay and some of its rivals, its easy to forget that they still have a lot of catching up to do with some of the bigger names in the space who have been doing this for a lot longer.

That includes Square, which passed a pretty big milestone on Wednesday, reaching one billion total payments. CEO Jack Dorsey revealed the number on Twitter earlier today.

A milestone: 1 BILLION payments through Square! Who made the billionth swipe? A merchant in Sacramento that's been using Square for 2 years.

— Jack (@jack) November 5, 2014

That number is impressive, especially given that the company was only founded in 2009. One billion payments in only five years? That's pretty good.

But it also highlights how far the company has to go. As Gigaom points out, PayPal, which has been around since 1998, and is about to become its own company again very soon after being part of eBay for the past 12 years, does three times what Square has done in its entire lifetime every single year! 

While the e-commerce payments company began as a card reader, which could be inserted into the phone jack on a mobile device, Square has been recently been looking to expand into new services that go beyond payments.

That has included Square Capital, a program that helps businesses grow by giving them quick access to funds, which was launched in May of this year. The company has also expanded into appointment-booking with the purchase of BookFresh, and food delivery with the launch of Square Order, followed by the purchase of Caviar in August.

Square has raised over $440 million in funding, include getting $200 million in a revolving credit line with Goldman Sachs leading the deal and Morgan Stanley, JPMorgan Chase, Barclays, and Silicon Valley Bank also participating.  The company most recently raised an undisclosed amount of funding from Victory Park Capital to expand Square Capital, its cash advance service. This new funding round would put it at at least $590 million.

The company is often-rumored to be heading toward an IPO and was said to entertaining the thought of going public this year. The rumors were making their rounds; supposedly of talks with banks, like Goldman Sachs and Morgan Stanley. And Square hired former Salesforce.com exec Sarah Friar as its new CFO last year.

Dorsey, however, scuttled those plans in February due to problems with revenue. Namely, the company is not profitable. With such a valuation, though, it seems likely that the company will go public sooner or later.

There could be one other issue for Square: new competition in the form of Apple Pay, Apple's new NFC payment app that it launched last month, as well as CurrentC, the mobile wallet from Merchant Customer Exchange, which includes retailers like CVS, Rite Aid, Best Buy, Gap and Walmart.

Amazon also launched its own credit card reader in August. Then there is the previously mentioned split between eBay and PayPal, a move that some believe could be a boon for PayPal, therefore giving Square even greater competition.

Square has a lot to celebrate given its recent milestone, but it still has a long road ahead to being on top.

(Image source: https://news.cnet.com)