Friday, May 6, 2011

More on "Visa Invests in Square to Tap into Twitter"...

Last week I wrote my Analysis on why Visa Made an Investment in Square and I received several emails regarding my assertion that Visa was more interested in Jack Dorsey's 200 million Twitter users than an unencrypted plastic swiper. After all, there are myriad POS swipers which connect to a mobile phone and only one doesn't encrypt the card detals at the maghead.  So why would Visa choose THAT one? I may be wrong about Visa having their eyes on a Twitter P2P platform, but I'm just sayin'...

New Theory About Visa’s Investment In Square: Visa Really Is After Twitter


Written by Evan Schuman - Editor: StorefrontBacktalk.com 


May 4th 2011Square simultaneously accepted a hefty Visa investment and then reversed course to match Visa’s position last week, many observers were trying to make sense of the move. What made Square so attractive to Visa? One industry observer—longtime payments power-player, John B. Frank—has an interesting, albeit non-traditional, take.  He argues that Visa’s affection for Square has little to do with Square and everything to do with Twitter.  Indeed, Frank’s argument is that it was all about Jack Dorsey (Twitter Founder/Executive Chairman and Square Founder/CEO) and his ability to make Twitter deals happen.    
“Shout out to Verifone: If it makes you feel any better, I’ve got a feeling, that Visa isn’t as interested in Square as they are in Twitter’s 200 million base,” Frank penned. 
“If Goliath was going to invest in David, why not a David with a PCI-certified personal POS? It’s because David isn’t really David after all. David is Goliath. Square is Jack Dorsey and Jack Dorsey is again Twitter. It’s all about P2P (person-to-person money movement) and this is Visa making a brilliant P2P investment/move.” 
Not so sure I buy into this very original theory, because I don’t see Visa connecting the dots with Twitter that aggressively—yet.  Still, if it’s wacky and conspiratorial and it involves Silicon Valley today, well, it’s hardly wise to rule it out.

Editors Note:  I find it interesting that Evan doesn't see Visa connecting the dots, (yet) but don't count Jack Dorsey out.  He can connect dots with the best of them.  He's in the payments space now, and he has a captive 200 million audience.  Person to Person money transfer is big business, and if you could "Tweet" $25 to your babysitter or $15 bucks to your buddy for the beer and burger you had last night at the local eatery/pub (one Visa card to another Visa card) then why on earth wouldn't you make it available to your 200 million base?   A better question would be "Why not"?  



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