Mobile

Mobile-payments company Square on Wednesday revealed its plans to go public, putting in motion what should be one of the biggest and most-anticipated tech initial public offerings of the year.

The 6-year-old maker of credit-card reading devices was expected to make such a move for months. Reports came out over the summer that the San Francisco-based company filed confidential paperwork with the Securities and Exchange Commission as part of its IPO plans. The new SEC filing Wednesday provided a major step toward an IPO and the first public financial picture of the startup.

Square’s IPO push comes just after its founder and CEO, Jack Dorsey, was named the permanent CEO of Twitter earlier this month. The decision by Dorsey, a Twitter co-founder, to lead two companies at the same time appeared to complicate Square’s IPO plans. The company wrote in its SEC filing that Dorsey’s role at Twitter “may at times adversely affect his ability to devote time, attention, and effort to Square.”

Square plans to list on the New York Stock Exchange under the ticker symbol “SQ.”

The Square card reader has been one of the most recognizable parts of the startup.
Square

Square is perhaps best known for the little white-plastic card-reader that plugs into a smartphone or tablet and enables small businesses to accept credit card payments. Square makes money by taking a cut of each transaction. The company also makes the Square Stand, which converts an iPad into a point-of-sale system.

The company has moved beyond the realm of the high-tech cash register to start offering a suite of services for small and medium-sized businesses. For example, its Square Capital program hands business owners a one-time cash advance in exchange for a cut of sales in the future. The company also runs a peer-to-peer payments service called Square Cash, which competes against PayPal and PayPal’s Venmo, as well as Google Wallet.

The SEC filing comes more than a year after The Wall Street Journal reported that Square was considering a sale, due to mounting losses and a shrinking cash pile. A Square spokesman at the time denied that the company ever seriously considered selling itself.

With the private company’s financial picture now publicly available, the Journal’s report proved correct that Square has faced substantial losses. Last year, the startup was $154 million in the red, compared with a $104.5 million loss the year earlier. However, revenue jumped 54 percent last year to $850.2 million, with transaction revenue making up most of the total. The company’s cash stockpile was nearly $200 million as of the end of June.

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Square plans to add to that cash with the IPO, looking to raise roughly $275 million, according to Wednesday’s filing.

The gross volume of payments Square processes reached $23.8 billion last year, up 61 percent from a year earlier. Rival PayPal, which recently spun off its parent eBay, reported $227.9 billion in total payment volume last year, up 27 percent.

The IPO is expected some time this year, though no date has been set. The number of shares to be offered and the price range haven’t been determined.

Dorsey, whose salary last year as CEO was $3,750, owns nearly a fourth of Square, while venture-capital firm Khosla Ventures owns 17.3 percent.

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Mobile

Mobile-phone owners are not just spending money on their phones and monthly subscriptions.

Sales of mobile-phone accessories shot up 32 percent during the first half of 2012 compared with the same period last year, says a new report from NPD Group.

Cases proved the most popular accessory, with sales soaring 70 percent over 2011 despite an average 25 percent increase in case prices. Stereo headphones with microphones took second place, with their sales rising 67 percent over the same period.

Protection and durability were ranked as the most desirable feature among 86 percent of case buyers. The quality of the case material and the lack of bulkiness also played a role in their buying decision.

“Smartphones tend to feature slim designs and glass materials, so protection accessories have become a virtual necessity to safeguard smartphone owners’ investments,” NPD analyst Ben Arnold said in a statement. “Price holds less importance than protection on the list of purchase influencers, and consumer concern over the quality of materials indicates the performance of these accessories is more important than their aesthetics or cost.”

Half of all consumers who bought their phones at a brick-and-mortar store picked up an accessory at the time of purchase. Those buyers also tended to spend more on accessories, almost three times as much as consumers who bought their items online.

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Mobile

ISIS, the joint venture between three of the national wireless carriers designed to spur the development of a wide-reaching mobile-payment system, said today it had formed a partnership with Visa, MasterCard, and American Express.

ISIS has struck a deal with all of the major credit card issuers, including market leader Visa.
Visa

In addition to an existing relationship with Discover, ISIS is the first to strike a deal with all four major credit card issuers. That marks a significant milestone for the venture, which has been slower to deploy its mobile-payment system.

“By working with the nation’s payment networks–Visa, MasterCard, Discover, and American Express–we significantly advance the vision of an open and secure platform that provides banks and merchants with a new and highly relevant way to connect with consumers,” ISIS Chief Executive Michael Abbott said in a statement.

ISIS, a partnership between AT&T, Verizon Wireless, and T-Mobile, took some knocks early on for being too slow to the game. It initially launched with Discover, but it quickly changed gears and began talking to the other credit card issuers. It also remained quiet as other companies such as Google made noise about their competing setups.

The venture plans to test a mobile-payment system next year in Austin, Texas, and Salt Lake City.

Later this summer, Google plans to deploy its Google Wallet feature. Google is partnering with carrier Sprint Nextel, which has one of the few smartphones in the U.S. market capable of letting people tap their phones at a register to pay for goods. That’s Samsung’s Nexus S, which has a near-field communications chip that can talk to special terminals found at checkout counters, gas stations, and cabs, among other locations.

Visa, the market leader among credit card payment providers, is a coup for ISIS. Visa isn’t working with Google; MasterCard is the partner for that initiative.

Others are ramping up their own initiatives. PayPal recently used the Nexus S to show off the ability to tap phones to transfer funds. Sprint also announced a partnership yesterday to use American Express’ Serve mobile-wallet application.

Updated at 9:42 a.m. PT: Adds additional background on various mobile-payment deployments.

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