June 17, 2016Blog Posts

Why Square’s Stock Is Struggling Even Though Customers Love It

TheStreet

HandyNYC owner Tommy McGhee has been using Square’s mobile credit card reader in his construction, renovation and design business for more than a year. He likes it so much that he dropped other services like PayPal. “I was using a variety of different mobile transaction apps,” McGhee explained in a phone interview. Square, which provides a small electronic device that can be attached to smartphones and tablets to read credit and debit cards, “is my go-to with regards to transactions now because to me, it’s just much simpler,” he said. “It’s cleaner.”

Despite praise from merchants like McGhee, however, Square stock has climbed less than 1% since going public in November. That’s better than the broader S&P 500 financials index but not as good as PayPal’s 2.1% gain, and it reflects the challenges facing the San Francisco-based payment processor in an industry that may be worth more than $2 trillion by 2020.

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