Square (SQ) has turned to Plaid to make payments through the Automated Clearing House (ACH) network easier for its merchants.
Square provides an array of financial services targeting merchants and consumers. It operates the Cash App platform for sending and receiving money and trading stocks and bitcoin. Its new partner, Plaid, provides technology that makes it easier for people to connect their bank account to apps for payments.
Square will use Plaid’s technology to allow its merchants to accept ACH payments without worrying about bank authentication. The goal is to enable customers to securely connect their bank accounts for easy payment when buying from Square’s merchants. Customers will need to enter their bank login credentials to enable payment on the Square network. Square is initially rolling out the ACH payment solution to its U.S. merchants. (See Square stock analysis on TipRanks)
Michael Epstein, partnerships manager at Plaid, noted that ACH payments pose less risk of interruption and error than credit cards. He explained, “ACH payments debited directly from bank accounts provide a lower-cost, more accessible alternative to credit cards.”
“We’re excited to offer ACH as one of many ways that businesses get paid fast and securely with Square,” said Square’s head of Payment Platform Dennis Jarosch.
Tigress Financial analyst Ivan Feinseth reiterated a Buy rating on Square stock and assigned it a price target of $295, which implies 47.49% upside potential.
“SQ continues to benefit from increasing Cash App and Seller engagement and its growing customer base,” noted Feinseth.
Consensus among analysts on Wall Street is a Moderate Buy based on 17 Buy, 8 Hold, and 2 Sell ratings. The average analyst price target of $284.63 implies 42.3% upside potential to current levels.
SQ scores a 9 out of 10 on TipRanks’ Smart Score rating system, implying the stock is likely to outperform the market.