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/2020/08/Capital-Raise.jpg
Private Equity: Vitruvian Partners Pulls In $4.7 Billion

Capital Raise Brings Firm Assets to Nearly $12 Billion.  Vitruvian Partners, a UK-based private equity fund, has closed its fourth buyout fund after raking in $4.7 billion.  Vitruvian Partners launched…

https://dailyalts.com/wp-content/uploads/2020/08/Liquid-Alts2.jpg
Liquid Alternatives Enable Access for Individuals to Alternative Investments

Liquid Alts Offer Endowment Style Investing to Individuals.  Liquid alternatives consist of a wide variety of investment options, strategies and portfolio options.  Alternative investment prevalence has been growing in recent…

https://dailyalts.com/wp-content/uploads/2020/08/ESG2.jpg
Private Equity Powers Global Sustainability Initiative
August 5, 2020     Investments, Latest News, News, Private Equity

A “New Normal” and Driving Force From Private Equity.  The global private equity community is buzzing over news that several private equity powerhouses have come together in a bold move…

https://dailyalts.com/wp-content/uploads/2020/08/department-40657_640.png
FinTech: Intuit-Credit Karma Deal Under DOJ Lens (ProPublica)
August 4, 2020     FinTech, News, Takeovers and Buyouts

According to ProPublica, a non-profit newsroom that investigates abuse of power, the US Justice Department will investigate Intuit Inc (NASDAQ: INTU)’s $7.1 billion acquisition of Credit Karma announced in February….