Jason Moser: Matt, last week, we were talking about these companies that we love so much,
this war on cash basket, Square and PayPal and Mastercard and Visa.
And I said, "Hey, let's put out a poll and see what people think about introducing a
regular weekly segment talking about these four companies, catching people up on any
newsworthy items." Matt, the people have spoken. 84%
of the voters in this poll said, "Yes, you need to introduce a regular weekly segment
talking about the war on cash." I don't know, Matt, 84%.
It was terrific turnout, close to 300 votes or something like that. That's enough.
Is that statistically significant? I don't know, but it made me feel pretty good.
We're going to go ahead and introduce a regular weekly segment on the war on cash.
We're going to talk about the companies that make up the war on cash basket, and any newsworthy items
that may have popped up, and there were a few.
Let's go ahead and hit the biggest item.
I think you and I will both agree this is the biggest item.
Square is losing its most public face to the company, in CFO Sarah Friar.
Granted, Jack Dorsey is the CEO.
But splitting time with Twitter, Sarah Friar is the one we see out there all the time talking
up Square's book. She's done a great job at it.
She is going to be taking off.
She is actually going to accept a CEO position at a company called Nextdoor, which is a social
networking company that focuses more on neighborhoods.
While we are happy for Sarah, and congratulations, certainly, on the CEO job, I'm not going to
sit here and tell you this is a good thing for Square.
She really has been a tremendous leader for the company.
What do you think about this, Matt?
Matt Frankel: I think she's been an absolute rockstar for the company.
At the same time, the stock is down about 30% over the past couple of weeks.
Does any one person make a company worth 30% less virtually overnight? No.
I'm not going to say this is a non-event like the Jack Dorsey stock sale the other week
or the negative reaction to the Square Installments.
Those were both non-events from a long-term perspective. This is an event.
But for one, I have no reason to believe Jack Dorsey won't put the right person in the CFO
role to replace her.
Hiring has been one of his strengths in the past, I think we can agree.
Does losing her make the stock worth 30% less overnight? Absolutely not.
Hopefully, one of these days, I'll be able to shut up about Square for more than a day or two,
so I can add to my position. It hasn't happened in quite a while.
I view this as a buying opportunity. Like I said, I'm sad to see Sarah Friar go.
She's the one who really is pushing the long-term monetization of their banking services to consumers,
like Square Cash that we've been talking about.
At the same time, I think Square will be just fine over the long run, even without Sarah Friar.
Moser: I tend to agree.
You never want to see a company where everything hinges on one person.
You want to probably avoid investing in those types of businesses.
I don't think Square is that type of business.
Given Jack Dorsey's role, I think you're right, he's made hiring a priority of his because
he's not really the day-to-day operations guy over at Square.
He's really making sure that he's hiring people that can keep him abreast of what's going
on and can not only execute strategy but really help dictate strategy.
I have every reason to believe that he and his team there will fill that role with someone
who is very capable of keeping the company on the path that it's on.
That's the nice thing, I think they're really on a great path right now.
They've got a lot of strategy laid out there in what they want to do.
So, I don't think this is something where you're bringing someone in to change something.
You're really bringing someone in there to keep things going in the same direction they're going.
Who knows when they'll get somebody in there? I have to believe it's a pretty attractive job. We will see.
In PayPal news, there are a couple of things that came up here with PayPal.
One that I saw, it's an interesting perspective for me, looking at the population of folks
out there who perhaps don't have a banking relationship.
PayPal will let customers deposit and withdraw cash now at Walmart stores.
That of course comes with a fee, and it's not a cheap one, either, $3.
But I think, again, it's something that PayPal is doing in order to be able to offer something
for everyone out there who's looking for a way to access their money one way or the other,
whether they have a banking relationship or not.
The other item that came out, I thought was a little bit more newsworthy.
It's in regard to Venmo, their popular money-transferring app that we see a lot of younger folks using.
I think it's very popular with the millennial generation.
They are going to start charging Venmo account holders when they make those instant money
transfers on the platform.
I think it was interesting from the point that when the news first came out on social media,
Twitter specifically, you saw people jump the gun there and think, "This is insane!
I'm deleting Venmo, I'm not going to use Venmo anymore."
I think they were a little bit unclear as to what this actually meant.
A lot of people out there thought this meant Venmo was going to be charging their account
holders for all money transfers. To be clear, this is for those instant transfers, right?
Frankel: Yeah, it's just for the instant transfers.
When I saw this news, my first reaction was, maybe it's a little too soon.
A lot of the reactions I was reading on Twitter said things to the effect that there are so
many free ways for people to send money nowadays, that maybe Venmo jumped the gun on trying
to monetize its service, and it's doing it the wrong way.
This is just the instant transfers, but that's what millennials want.
Millennials are very anti-fee. I don't think Jason's a millennial, I'm not.
Moser: [laughs] I wish!
Frankel: I missed the cut off by a few months, depending on who you ask.
Millennials want free and they want quick.
Most of the millennials I know that use Venmo use it because it's free and want their transfers
done instantaneously. I think the fee was like $0.25 for an instant transfer.
There was a fee, but it was very cheap. Now, if you're transferring $200, it's a $2 fee.
That's not nothing.
Like I said, my gut reaction was that it might be a little too soon, and that they should
focus on growth instead of monetization at this point.
Moser: Yeah, it's very possible.
They've noted more than once that they aren't making a lot of money from this.
It's not a profitable part of the business thus far, but they definitely see it as something
that should be material to the PayPal model years down the line.
Instant transfers are one way. They obviously have the Venmo Visa card, which is another way.
It'll be interesting to see how they manage this.
It's worth noting, too, there is a risk that any financial institution takes on when they
make that transfer available immediately.
Ideally, you'd like to see them be able to use the data to make those types of decisions
and perhaps do it in a fee-friendly way. But I guess time will tell here.
We'll see how management figures their way around that one.
Certainly something to keep in mind.