Keep your (monetary) friends close, but your competitors closer
More news on Square, the silicon valley start up that’s taking on the mighty issue of taking mobile payments on your smartphone. Previously they made an aggressive PR move to undercut the fees paid by merchants, and know they’ve taken on a new investor.
Which is pretty smart. Sometimes you want to take on investment to raise funds (such as the $27 million at the start of this year), and sometimes you take on an investor to get access to their knowledge and support network. I get the feeling that in the case of Square, bringing Visa on board is strongly in the latter category. More than anything else, this is the industry giving Square a nod of approval. Visa will supply an advisor to the board, along with a board member from JP Morgan Chase from a previous funding round. That’s a lot of old world experience that they can tap into – and Visa will also be able to have information and the start-up experience from Square flow back to its development team.
It also tallies in nicely with many of Visa’s plans going forward, and it’s clear they’ve been keeping a close eye on the space, even before their own blog post on Jack Dorsey’s little company.
The Square story is far from over.