Square’s transaction margins are slim, but not a cause for concern. For each transaction, Square receives 2.75 percent, but 0.15 percent of that is taken by Mastercard or Visa. A further 2 percent is taken from the bank that releases the funds, leaving Square only 0.6 percent.
The Motley Fool, however, finds that the small margins are sufficient for Square to pursue other more lucrative ventures, such as investments through Square Capital. Square reported a disappointing loss in Q2, and while software and product revenues grew, they are a small part of the company’s business.
Here are the earnings data:
197% | The increase in software and data product revenues
72% | The increase in costs
45% | The increase in gross payment volume for the quarter, year over year
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$0.14 | Square’s reported loss per share for Q2 2016 on revenues of $379 million
$0.09 | Square’s loss per share for Q2 2016 on revenues of $344 million that was expected by The Street
