Okay, Jack Dorsey. Jack Dorsey, I'm going to stand up. How you doing? How are you? So I almost did. I wanted to change up how I dress for these events and I was thinking very strongly about all black. And not only did my wife tell me that was a terrible idea and I couldn't pull it off, but then I thought I've seen Jack in a lot of black recently. And then I woke up, actually I saw you a couple hours ago and I said wow, I'm really glad. So you two pull it off. And that's the last... are those the Yeezys? They are. Okay. Now that we've gotten through my outfit, I know now the fashion portion of the interview is done. Sorry. I'm going to start. So do you want to start on Twitter and get it out of the way or shall I plague you later?
You can, you can do whatever. My mic's not working actually, is it? No, I can hear you. All right, so Twitter...
Explain in detail and in triplicate if you can the buying process of Twitter that's going on right now.
Secondly, do you feel responsible for Donald Trump being president? I'm just trying to do the easy ones. America is responsible for Donald Trump being president, but do you feel Twitter had some... what do you feel? What do you feel like? You know, here this guy is used, he's like a Twitter... so tell me what you think. And it's all Saturday Night Live and it's an interesting thing, but he really knows how to use the tools that you've provided him from your brain.
He does. He's known how to use it for quite some time. And yeah, I mean, I think it's an important time for the company and the service. And having the president-elect on our service, using it as a direct line of communication, allows everyone to see what's on his mind in the moment. And I think that's interesting. I think it's fascinating. I haven't seen that before. So we're definitely entering a new world where everything is on the surface and we can all see it in real time and we can have conversations about it. So where does that go? I'm not really sure. But it's definitely been fascinating to learn from.
Complicated. You know, it's... I feel very proud of the role of the service and what it stands for and everything that we've done and that continues to accelerate every single day, especially as it's had such a spotlight on it through his usage and through the election. But the elections have always been big on Twitter. Our first election was 2008.
But this is unprecedented, the use of your tool. And what's the complicated part?
The complicated part is just, you know, what does this mean to have like a direct line to how he's thinking in real time and to see that? I'm not sure. And there's, you know, we certainly play a big part in distributing news and opinions and what people think about what's going on in the world. And you know, we have a role and responsibility to make sure that people are seeing what they need to see and they can have easy conversations and really get to the truth. And that's complicated. So we're learning as quickly as we can and that's the complicated part, is we have to learn even faster.
Now you're done? No, I'm not done yet at all. I could go on for hours. I mean, I was going to jump in with a Twitter critique of my own, but I mean, this is Code Commerce by the way.
It is Code Commerce, yeah. Good reminder. We could talk about Twitter without being... no.
So I mean, I think obviously it's been about a year and a half or so since you, if I have my timeline right, became a CEO of... nope, that's not right. It's been about a year since you became permanent CEO of Twitter as well as Square. And in that time Square has gone public with what seemed to be like a little bit of a target on its back in that you had this big valuation, there's a lot of talk about overvalued private companies, and then you know, your pricing didn't necessarily work out from the start the way you wanted. Now in the year since, you've beat expectations by Wall Street quarter after quarter, raised guidance, seemed to be in a really good place, a stable place at Square. Still a lot of room for growth, still questions, but a stable place. So the question I get a lot from smart people who think I have smart answers, I don't, is wouldn't this be a smart time or a right time for Jack to maybe be chairman of Square and step back, he has a strong leadership team, and then focus on Twitter? And I never have a good answer because I don't have a direct line to you. So basically, how long are you going to keep doing two jobs?
I don't have a specific time frame. I want to be measured by our results and our results ultimately come down to do people want to use our products and do they want to use them more and more. And we're showing that at both companies. Yes, there is an acceleration of usage. People value it. And we're seeing that every single day around every aspect of the product. So my intention is to serve both companies in every way I know how and to make sure that we are really focused on what's most important for each. And I think my skill on that is getting us to simplicity, focusing on what's essential, making sure that we're really customer-first and focused. And we're doing it. It's, you know, at Twitter it takes time. And Square is a year as a public company and I'm really proud of the transition, but we still have a lot to do and still a lot I feel I can really contribute a ton to as CEO.
What are the specifics of what you think you still bring and will continue to bring to Square as CEO versus as chairman that are keeping you in that role?
Well, I think, you know, as chairman you don't see the day-to-day, you don't see the operational aspects of the company. And I think it's so important to not just opine on the direction but actually to see it through. And I really love the details of our work and you miss that from a board level. And I think those details matter so much. And really, you know, why the details matter and it's hard to get a grasp of that from a board level. You know, I want to spend my time walking around the office and hearing conversations I could never schedule because it makes me think in a completely different way. And sitting down with a team and then just, you know, actually looking at what we're doing and hopefully simplifying it or even just cross-pollinating some of the ideas to other teams. I think that's a big function of the CEO and then the team as well. And I'm really proud of the team at both companies, but there's still work to do and I still have some gaps that I want to fill at both companies and that feels better. But you know, this is not something that I ever feel is going to have an end point or be complete.
So let's talk a little bit about Square and what's happening to its business now. Now we just had Jennifer Bailey on and I'm going to set you up for something. Your relationship with Apple Pay.
So what do you have to tell us?
Well, we have some things. But Apple Pay, you know, as Jennifer indicated, one of the things that we've been pushing more towards is authenticated payments. So there's two manifestations of it. EMV is the underlying technology behind both. For people who might not be deep in payments right now, when you're talking about authenticated payments, you're talking about what's secure. So there's a chip card implementation, which is the thing that a lot of people hate because the time it takes to transact. Industry average is about 11 seconds. We got our reader down to 4 seconds, which is meaningful because you get to see more customers. But NFC is the other manifestation of EMV and the standard, and that's sub-second transaction time. So we love that and we're working with Apple to make sure that we can help change some of the behavior. And it's not something you can just do from one side of the counter, it has to be both. So we've been looking at high-density environments like Coachella where we got the tap rate and Apple Pay rate up to 14%, where the industry averages about 1% of all transactions including cash. 14% were Apple Pay. The market out here, I know we're in San Francisco, but the market out here is 24%. The Kanye West stores, the pop-up shops in Texas were 15%. So we see this growing. And if we can get to 15%, we can get to 30. And if we can get to 30, we can get to 70. And 70 is possible because the rest of the world is mainly tap. Australia, for instance, 70% of transactions are tap transactions. So we love that because of the speed and we want to certainly do it from the seller side, but we also want to do it from the buyer side. So today we're announcing we have a product called Square Cash. And we've been evolving Square Cash for quite some time. We started with utility of peer-to-peer and people sending money to each other. And then we allowed people to store money at Square. So we have a stored-value account that you can actually keep your money. And this is important for people who want to segment their finances from their bank account or who don't have a bank account and just sign up and use that, which we have seen, which is important. And then we added a virtual card on that that you could then add to Netflix. This is a digital card. You could add it to Netflix, you could spend it anywhere online, you could use it in Amazon, Lyft, Uber, wherever. And we also saw people take that card and they would forget their wallet and they would use the number on that card for card-not-present transactions. So we did the next thing. And today we're adding that card to Apple Pay. So as of right now in Square Cash, you can download Square Cash, you can get your virtual card, you can tap a button, it automatically adds to Apple Pay. For the... you have it right? Yeah. So I've been using this as my primary card for about two months and this pulls from my Square Cash account. And I can use this anywhere that Apple Pay is accepted, anywhere that NFC is accepted. Is that online and in-store? So I can use this on the web for Apple Pay, but I can also use it at Blue Bottle for coffee in a physical store.
So why... my big question, I saw the announcement, not the Apple Pay one but another one recently when you were talking about people can now store money in Square Cash and then people can link or create a digital card. What is the advantage of that versus, you know, my whatever card, you know, my debit card, my credit card?
It's crazy to think about, but people just want a more modern interface to their finances and something that's simple and straightforward and modern really wins. So Square Cash is a very, very simple app that does one thing, it does it really well, which is peer-to-peer. And we've been adding more financial services on top of it as we go. So I would say it's, you know, it's really the ease of simplicity. And we do have customers, we've seen customers who sign up without linking a bank account, without linking a credit card.
They request money from their parents or their friends and then they use this virtual card to spend it on Netflix or Amazon.
So you're replacing a bank for them?
We, you know, there's a... it might be a starter. I don't know if it's replacing it. We're definitely seeing that use case emerge, but it's not in mass yet. But it's interesting. And I think that's consistent with how Square approached it. You know, we never saw ourselves as competitors to the banks or the card networks. We've partnered with them because what we saw was that people were being excluded from the system. And they're being excluded from the system because the only way that people could vet if I could accept credit cards was a FICO score. A lot of entrepreneurs just getting started had really terrible credit. When we started Square, I had credit card debt and really terrible credit. I would not be able to start accepting credit cards. So we changed that by applying machine learning to the problem, having a deeper understanding of the seller. And we're doing the same thing with Square Cash. So we're not competing with that entity, we're making it a whole lot more accessible and a whole lot more inclusive.
So you're talking, you just said starter, which is interesting. It's people who don't have bank accounts, who don't necessarily have credit cards. Your regular, the main Square business where you have small businesses using it. Can you talk about shifting it? You know, I think of companies like Slack and others. How do you shift to the big transactions versus a cab driver, a pottery person, a food seller? How do you look at your business over time moving to larger merchants?
Well, that's already happened for us. I mean, we've seen 40 to 100 to 150 location merchants use Square. And to me, that makes me really happy because that means we're building a utility that scales. It doesn't matter what your ambition is, it scales.
What percent of your business is this?
It's mostly small to medium-sized businesses, correct. Going up-market in larger sellers is a growing part of our business.
You keep stressing, the company stresses it in earnings calls because I know Wall Street seems to be latching on to whatever bait you'll give about how you are scaling up to larger merchants.
Yeah, and it's just happened organically. So it's not a significant percentage, but it's a growing percentage of our business.
And how do you get that business? How do you convince those... it's been organic?
It's been organic. People come to the website and we have a call-me form and our account management team reaches out. And so all of our larger sellers have come through the website organically.
And not you all reaching out to them?
No, we do not do proactive outreach to larger sellers.
We haven't needed to. The majority of our growth has been organic and that's remained constant through the start of the company.
I'm going to go back to Square Cash for a second. I've been slightly obsessed with my coverage of Square about why you guys are still doing Square Cash, why you did Square Wallet at some point. A lot of people I talk to who work with you, know you well, talk about your love for consumer products and also sort of the idea of like a magic payment experience, which for some people is what Square Wallet was back in the day. So, you know, you provide, core of your business is for merchants, but what is the business opportunity of having consumer products and mainly Square Cash?
Well, it's a longer-term view. But the original reason we did Wallet is because we're, you know, we're not sellers. And it's really hard to build a product for someone that isn't you. It's really easy when you're building for yourself. And so there's always that desire to build something for ourselves. So the way we got around that is how do we build for the customer of our customer? We're not sellers, we're not Blue Bottle, we're not Sightglass Coffee, we're not the massage therapist. But we love these people and we want to help them. And we are their customers. So how do we create a great experience for them? And if we create a great experience for the customer of our customer, then they will benefit as well, our customer will benefit. So Square Wallet came because we wanted it to have this feeling of like I want a tab open everywhere. I just want to be able to walk in, I want to be secure, and I want to be able to say my name. And I want to give the seller a tool to recognize me, recognize that I'm a regular, recognize my name, recognize what I like, and treat me better because that's going to build loyalty to me. That's it. And that's the experience we wanted to have and that's why we built it. And the same thing was true for Square Cash. We had all these payment rails and we found ourselves wanting to send money to each other and there wasn't a way that we were really happy with. So we just built it. And it started with a hack. And what if we could like just by stating the fact that I'm sending you $5, $5 is actually sent. So originally it was I sent an email to Karat, like it says $5 in the subject line and $5 is sent. And that just feels... you never sent me money.
I know, I know. I was told not to. He's short on it. Can I also go... so there's that business and then you have a lot of potentially large businesses. I want... can you break down a little bit of how you look at each of the businesses? Square Capital, your delivery business that I still, I'm sorry, don't get.
And you don't get delivery from it?
No, I don't. But if you could explain where they fit into your vision of where Square is going, because there's a lot of moving pieces here and some I don't quite understand where they fit in. So I understand Capital, but please explain how you...
We're kind of building around customer needs. So we started Square because we saw that people are being left out of the economy because they couldn't accept the credit card. They were not able to make the sale because they couldn't accept the credit card. And so we started with a simple, what do we need to help our sellers make the sale independent of payment device? And then we did that and it worked. And then we asked the question, okay, how do we help them make more sales? What's the universe of solutions that help them make more sales? One is the register. Why the register? Because it gives them information about what they're selling. If they have information about what they're selling and how much they're selling of it, they can make better decisions about what to stock and what to invest in and what to market. Two is Capital. Access to Capital and fast access to Capital. So one of the things we did is next-day deposits. And then we created this product off the back of Square Cash called Instant Deposit, which we've now instant-deposited a billion dollars through that product in just a year that it's been open. And that allows you to get access to your money instantly.
These are merchants you're talking about?
These are merchants. And then Capital was a more proactive way of loaning people money. And the reason we want to do that is if I have capital, I can buy a new salon chair or I can hire a new employee or I can open an entirely new location. And then that gets me more sales. So then our model becomes really simple: if we help a seller grow, we grow. And if we grow, we can help more sellers. And that's really behind everything that we do, including our delivery service, Caviar.
Fit this in because I'm still...
