Three things Square can do to preserve double-digit volume growth into 2022

By the numbers: Square processed $45.4 billion in gross payment volume (GPV) in Q3, a 43% year-over-year (YoY) increase, per its Q3 shareholder letter.

GPV growth outperformed the same quarter last year, when the metric jumped 12% YoY. GPV also skyrocketed nearly 61% compared with Q3 2019 (Yo2Y)—which suggests that unlike many companies, Square’s business has flourished during the pandemic.

How we got here: Square has attracted larger and more diverse businesses into its seller ecosystem by offering solutions that meet specific operating needs. This has helped the company reach more customers at the point-of-sale (POS) and boosted GPV.

• In Q3, larger sellers (those earning more than $500,000 in annualized GPV) made up the largest cohort of Square sellers and accounted for 34% of the company’s overall GPV in the quarter. Tools like Square Terminal—its all-in-one POS solution—and Shift Scheduling may have kept larger sellers tied to the company.
• Square has also focused on attracting a broader range of sellers to its ecosystem: The company introduced Square Appointments, a POS offering for the beauty industry, and also launched a restaurant solution, Kitchen Display System, that consolidates online and in-person orders.

What’s next? Here are three things we think could bolster business for Square headed into 2022.

• Forays into buy now, pay later (BNPL) and Bitcoin. Square agreed to acquire Afterpay in a whopping $29 billion deal set to close in Q1 2022. The purchase expands the financing capabilities Square can offer merchants and makes it a more attractive provider—especially as BNPL grows increasingly popular among consumers. And Square is also developing a Bitcoin hardware wallet, which can open up a new revenue stream for the company as demand for cryptocurrency payments grows.
• The expansion of Square’s Cash App ecosystem. In September, Square launched Cash App Pay, which lets US sellers accept Cash App payments. This integration opens up another use case for Cash App and also lets merchants offer another digital payment method to their customers—setting up a win-win situation for Square that can help boost GPV. And Square also opened Cash App to teens (with parental oversight), which can significantly increase the platform’s user base.
• A growing global presence. This year alone, Square moved into Spain, Ireland, and France and also expanded its product offerings in Canada and the UK. These expansion efforts can help Square compete with PayPal, which has built a substantial global merchant base, and also increase the company’s revenue potential.

Related content: Check out our “Payment Facilitators” report to learn about how Square’s PayFac model is disrupting the traditional merchant acquiring process and helping it build a merchant services empire.