All The Fintech - 5.3.18 - On Square and Full Stack Processing

Square recently announced their acquisition of Weebly, a website creation platform, for around $365MM. The Weebly acquisition seems to demonstrate a focus on international expansion and longtail e-commerce, which also increasingly puts Square in competition from a processing perspective with offerings from PayPal, Stripe, and Shopify.

Meanwhile, just last month Square also announced their acquisition of Zesty, a corporate catering startup. (Side note, both Weebly and Zesty were Y-Combinator companies although that's probably more of a reflection of YC's increasingly larger reach in startup investing than anything else.) The Zesty acquisition was messaged as a method to increase Caviar's corporate ordering business as Square continues to push into the restaurant vertical.

The money to be made in payment processing isn't in the processing itself, but rather the service layer that one can build on top to charge a premium. For example, Stripe layering on fraud tools (w/ Radar) + business intelligence (w/ Sigma) + billing to justify charging significantly above interchange. Square helping brick and motor companies easily accept payments in store (via dongle or with their own POS), offer rewards, schedule appointments, and now launch online. What's next, shipping fulfillment? Delivery via Caviar for physical goods? The era of the full-stack processor is upon us, which also makes Amazon an very interesting entrant into the market.