Square's Competitors Summarized By Credit Suisse

While Square Inc SQ is a “strong growth and high quality” company, its stock valuation appears full, Credit Suisse’s Paul Condra said in a report. He initiated coverage of the company with a Neutral rating and a price target of $12.

Square has a quality product and defensible position and has been benefitting from demand for simplicity in payments, analyst Condra mentioned. He added that the company could achieve adj. EBITDA margins in the low 20 percent range by 2020.

Square has the potential to “develop meaningful software and lending businesses over time,” Condra wrote. He noted, however, that the company was facing tough competition from new entrants and incumbents.

Related Link: Square's October Decline Has Opened An Attractive Entry Point: Vetr

Competitors

The analyst compared Square’s offerings to those of its competitors:

Terminal Price

• Square: Register, $99; Chip Reader, $49; Magstripe Reader, Free.
• ShopKeep: Register: $49/month.
• Revel: $119/month; second, $70/month; third-plus, $40.
• HarborTouch: No upfront costs; service fee, $39–$69/month.
• Clover, by First Data Corp FDC: Sold with merchant account; price differs [over 3,000 locations].
• LevelUp: Scanner, $50; Tablet, $100.
• PayPal Here, Paypal Holdings Inc PYPL: Chip Card Reader, $49 with rebate.
POYNT CORP COM NPV PNYTF: $299.

Swipe Rate

• Square: Register, 2.75 percent fixed rate [swipe/online].
• ShopKeep: Basic, 2.7 percent; professional, 2.4 percent; unlimited, 2.15 percent.
• Revel: first registe, rates not listed.
• HarborTouch: Rates not listed.
• Clover: Swipe fee dependent on bank from which POS was bought.
• LevelUp: 2 percent from fixed rate.
• PayPal Here: 2.7 percent fixed rate.
• Poynt: Dependent on bank.

Notes

• Square: Register, process using iPhone, iPad or Android; digital receipts via text or email.
• ShopKeep: First cloud-based POS, works when offline/internet down.
• Revel: Apple iPad POS, works with almost all processors [USAePay].
• HarborTouch: Hardware, Elite or Echo models.
• Clover: Hardware, Clover POS.
• LevelUp: Processors, Braintree, Bank of America, use app to pay [QR technology].
• PayPal Here: Same-day funding.
• Poynt: Screen on both sides, no need for merchant to swivel; three apps (terminal, register, co-pilot).

Functionality

• Square: Register, Digital receipts, loyalty programs, inventory management, appointments, ecommerce.
• ShopKeep: Inventory management, business analytics, loyalty, digital marketing, staff management.
• Revel: Process anywhere in store, inventory management, track sales volume/employee, multistore.
• HarborTouch: Industry specific.
• Clover: App market with business management apps, free or for a small fee.
• LevelUp: Rewards, analytics<./li>
• PayPal Here: Invoicing, accept all payment types (including cash or checks).
• Poynt: Loyalty, analytics, anywhere in store.

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