Square COO Keith Rabois Departs Company | Hacker News Reader

Square COO Keith Rabois Departs Company

allthingsd.com

54 pointstuhin17 comments

Wow, I had no idea they were processing $10b/yr (I thought it was <$1b/yr).

That's getting to the point where they make real money (maybe $50mm/yr?) and have a serious shot at profitability.

If my math is correct: 2.75% of $10B/yr = $275M/yr. Although they may not be charging 2.75% across whole $10B. I don't think Starbucks would pay 2.75%.

Don't forget that the credit card companies get most of that.

They have to give most of that to the credit card companies. I am not sure how much of the 2.75% they get to keep but I would guess less then half, maybe even only a quarter?

I remember reading somewhere the average swipe fee is 1.6% for cards. Don't know how accurate that is but I'm assuming it's not far off.

You're pretty close to the mark - at least for a company doing that much payment volume. Maybe closer to 1.8% or so. There's dozens of variables (debit vs credit, issuing bank, network, international, chargeback rates, etc...) so it's hard to say with any reasonable degree of certainty.

There's a higher fee for "Card not present" transactions.

Square is card present though.

It actually is more like $200mm gross (due to discounts, and that's run-rate, not 2012 I think), and then goes to Chase Paymenttech and to the card associations, interchange, issuers via chase -- as well as all their other costs. So I think netting $50mm off the transactions is generous.

They have at least 500 employees -- figure $100k/ea loaded cost, only possible since I think a lot of those employees are not engineers. That's all of it right there.

They really need to be in the 50b/yr range to be doing well. OTOH, they will probably get there in a year or two, and I don't see their costs going up much.

Paypal's Merchant Services net Total Payment Volume was $28 billion in Q4 2012, up 28 percent year over year. PayPal revenues for Q4 2012 were $1.54 billion, growing 24 percent year over year.

I am not surprised anymore. I was when I first saw their card reader at the tiny smoothie shop next door. And then again when the old guy with the hot dog cart also got one. But now if I hear Square is making $100b/yr I'll just think of those tiny business and say: Obviously.

Pretty shocking. Although Square is well on its way, I think there is still a lot of good COO work to do. But I am definitely looking forward to what's up next for Keith (who clearly had a tremendous run at Square).

didn't Sequoia just lose a partner?

Greg McAdoo - whats the connection?

Rabois seems moderately connected to Sequoia- they've shared in a ton of deals, given he's a prolific / selective angel & he and Sequoia partner Roelof Boetha both worked at PayPal.

Don't think there's a formal connection between him and McAdoo.

That could make sense.

And, Sequoia invested in Square too.

Reply on news.ycombinator.com