FinTech: Digital Payment Company Square To Give Banks A Run for their Deposits – Analyst

July 7, 2020 | FinTech, News
https://dailyalts.com/wp-content/uploads/2020/07/PD00902_-_US_payments_acacia_apple_pay_photobreak.jpg

Shares of the payment fintech were on a tear Monday after an analyst put a price target of $ 150.

San Francisco-based Square Inc (NYSE: SQ), a digital payment processor led by Jack Dorsey, benefited Monday from a highly bullish report by SunTrust analyst Andrew Jeffrey. The stock touched an all-time high of $ 128.36 after the analyst wrote that it could take away direct deposits from banks and ultimately sit on a market share of 20%. Square’s market capitalisation, based on Monday’s close, is $ 52.27 billion. According to a Bloomberg report Square now has a market capitalisation higher than all but four banks in the KBW Bank index.

For good measure, Jeffrey has a buy rating on the company and has assigned a target price of $ 150.

Square and COVID-19

Square added 11 million direct deposit accounts when digital payments surged during the coronavirus pandemic.

The company’s highly popular Cash App appears to be doubling up as a business account for small businesses, and this could lead to more financial services heading out of banks and towards Square.

The payment processor also gained goodwill when it processed pandemic – related government stimulus payments.

Unsurprisingly, therefore, the stock has jumped over 370% from its COVID-19 low of about $32.

Banks on the back foot

Year-to-date, the stock is up 90.17%. In contrast, the KBW Bank index is down 34.82%.

In March, the FDIC conditionally approved the application by Square Financial Services, a subsidiary, for deposit insurance.

The Utah Department of Financial Institutions also granted charter approval to Square Financial Services.

Recognized by the FDIC as a so-called “industrial loan company,” the company will likely launch in 2021.

It will operate as Square’s independent banking subsidiary. The firm will offer both small business loans and deposit services such as checking and savings accounts out of Utah.

Related Story: Square Inc Cleared by the FDIC and Utah to Set Up Business Bank                                                  

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Shape

Latest Alternative Investment News

https://dailyalts.com/wp-content/uploads/2023/12/AMD_headquarters_santa_clara.624da707519a6.jpg
Artificial Intelligence: AMD Takes On Rivals In The AI Chip Sweepstakes
December 7, 2023     Artificial Intelligence, News

Chipmaker AMD (NASDAQ: AMD) has unveiled a range of innovative AI solutions spanning from data centers to personal computers. The AMD Instinct MI300 Series features data center AI accelerators, while…

https://dailyalts.com/wp-content/uploads/2023/12/RHCEU-Inline.jpg
Digital Assets: Robinhood Debuts Crypto Trading On Its App In The EU
December 7, 2023     Digital Assets, FinTech, News

Robinhood (NASDAQ: HOOD) has launched its Crypto app in the European Union (EU), allowing eligible customers to engage in crypto trading with the added incentive of earning Bitcoin rewards. Customers…

https://dailyalts.com/wp-content/uploads/2023/12/Samsung_UK_Samsung_Pay_Lifestyle_0552-revised-Pictogram-23.11.30-1024x744-1.png
FinTech: Samsung Electronics Ties With Mastercard’s Wallet Express
December 7, 2023     FinTech, News

Samsung Electronics (KRX: 005930) and Mastercard (NYSE: MA) have partnered to launch the Wallet Express program, offering banks and card issuers a cost-effective way to expand digital wallet offerings. Through…

https://dailyalts.com/wp-content/uploads/2023/12/Revaia-founders.jpg
Venture Capital: Revaia, Europe’s Biggest Female-Led VC Firm, Racks Up $160M For Second Fund
December 7, 2023     ESG and Sustainability, News, Venture Capital

Revaia, Europe’s largest female-founded venture capital firm, has successfully raised €150 million ($160 million) for its second fund, Revaia Growth II. The funding was secured from sovereign wealth funds, family…