Jack Dorsey takes over as Block's Merchant Unit CEO, Analysts Predict Priorities

Published 8 months ago

Jack Dorsey, co-founder and head of Block, is set to take over the role as CEO of Block’s merchant unit from Alyssa Henry starting October 2. This transition comes on the heels of an outage that affected Square, causing merchants to lose payment processing capabilities for two days.

Sales Strategy Revamp

Faced with intensifying competition in the point-of-sale marketplace, Dorsey is predicted to focus on refining Square’s sales strategy, which was recently restructured to target specific industry verticals. Square, originally recognized for its white card reader that enabled small merchants to process card payments, has since expanded to offer a range of merchant software and services.

Under its revised strategy, Square has organized its sales staff by industry, focusing dedicated teams on retail, restaurant, and services. The aim is to improve its penetration in the merchant services sector.

Attracting High-Value Merchants

Dorsey is also expected to play a crucial role in attracting larger merchant clients. Block has been striving to increase its share of merchants generating more than $500,000 in annualized gross payment volume, which are considered to be more long-term clients. Square’s share of such high-value sellers has increased over the past two years.

Addressing Outage Issues

The recent outage at Square is another issue that Dorsey will need to address promptly. The outage, which was due to a domain name system error, lasted for two days, affecting not only Square but also Block’s peer-to-peer business Cash App. To avoid future outages, Square has implemented numerous measures including deploying a new set of firewall and DNS server changes, expanding offline payment capabilities, and increasing operational measures.

Expanding International Presence

Finally, Dorsey is anticipated to focus on expanding Square’s international presence. Square has gradually increased its non-US footprint, extending its merchant services to countries including Canada, Japan, Australia, New Zealand, the UK, Ireland, France, and Spain. Currently, international sales account for about 16% of Square’s gross profit, doubled from the second quarter of 2021.

Dorsey’s task will not be easy, with formidable competition from companies like Fiserv’s Clover and digital payments company Stripe. However, with Dorsey’s experience and an array of strategies in place, Block is gearing up to strengthen its position in the merchant services sector.

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