YouSaid · the spoken record

Sarah Friar

lines on the record: 81
first: 2018-09-29
most recent: 2018-09-29
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“So yeah, so effectively, when we originate a loan with a seller, we package that up and we sell that on to third-party investors. They love it because it's actually the default rates on score capital have been approximately 4%. So it's been a great returning asset. And so they're getting to invest in something that normally wouldn't be open to them. And we get to take it away from our balance sheet. So it's not balance sheet risk to square ultimately.”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“Of daily sales. Percentage of daily sales. So if you have an amazing December, you'll pay back a lot. And if January you decide to go on vacation for two or three weeks, you pay back zero. And what that does is it allows businesses to actually smooth out, to pay back alongside what their working capital is doing. And so most small businesses actually go out of business, not because they didn't have the cash flow, but they just didn't have it at the time. And so by making that match, we think we keep our businesses much more healthy. And then the final piece for Square, so sitting in my chair of keeping square safe, we ultimately true sale on those loans off our balance sheet to third-party investors.”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“Use those signals plus others that were making the right underwriting decision. So that's kind of rule one in terms of managing risk. The second piece is these are very short duration loans. Effectively, what we facilitate is about an eight to nine month loan. So to the extent the environment is changing, it allows us to be a lot more nimble. They're not like three, four, or five-year term loans. The third thing, which originally I'd love to say we were super smart and we just saw it, but something we thought was a bug became a feature. So we actually allow people to match their repayment who had their businesses trending. And that's because the way you repay is based off of every swipe. So if you have an example,”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“So capital is probably one of my most favorite products because it gets back to what small businesses are traditionally not allowed access to, which is access to capital to grow. We see this over and over again. Like some of the stats show that 40% of small businesses won't even ask for a loan from a bank because they just believe they'll get turned down. So they don't even go out and look for a way to invest in their business. Capital today, we've done about $3 billion of lending. Our average loan size is about $6,000. So these are going up to small businesses. In terms of managing risk, we really thought about it in three ways. The first is we have access to your point of sale and to your payments data, which is an amazing signal when you want to understand the risk. And from when Square was born, we thought about risk different life. We've always been using machine learning, now deep learning, to make sure that as we”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“Jump to the lending business for a little bit. Square capital is now, I don't know exactly how many years old, but I'm going to say four years. I was going to say three. Okay, four years old went into merchants in your system. A lot of fintech companies now offering different lending services to their customers, even stripe testing it out. All these companies have operated in a pretty good, all these services have operated in a pretty good economic climate. How do you think about are you already starting to safeguard against what happens when our economy doesn't look like it? And what does that look like?”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“Absolutely. I think anything you do today with a bank account, you should look to Cash App to begin to emulate more and more of that.”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“There could be things like savings, investment. We actually already allow people to purchase Bitcoin, for example, which we think of as allowing them access to an asset. So it was definitely probably jumping three steps ahead of what people might do the first with an account. But we wanted to grab hold of a moment in time and really as a payment innovator understand crypto, understand what it would mean to move crypto from person to person. And so it's the fastest, easy way, if you've never bought a piece of a Bitcoin, Cash App is the way to do it. It's seconds and it's in your account and you can decide, am I holding it because I think it's going to go up?”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, because how can we help them make their money work for them? So lots of ideas on the table and the team is a really great team in terms of fast-paced experimentation.”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“Today, I mean, they're effectively funds held on behalf of customers. You can see on our balance sheet, I think it was about $209 million sitting on our balance sheet as of the end of June, so as of the end of Q2. So it's definitely a big balance. And we're starting to think about are there other things we could do for our customers there, you know, maybe help them think through savings.”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“To use the service. It's too limiting. In the end, people don't want to be told what to do with their money. They want to be able to make the choice they want to make. And so that's the goal with Cash App is to keep it as wide as possible, but keep adding more and more utility for the consumer.”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“Because I think we learned the lesson with Square Wallet where you don't have density. You actually need to open up the top of the funnel and allow a consumer to do whatever they would do, whether it's a square merchant or not.”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“Sure. So, you know, as I said, we have three pillars to our strategy omnichannel, banking services, and international. And our goal on the banking services is, first of all, how do we get those 30 million or at least there's about 18 million or truly underbanked. There's a bunch of unbanked. We'd love to fix that too, but that's kind of an IDV verification problem. But if we can bring all those underbanked folks up and onto the system, we think that's just a natural rising tide. You start combining it with what's going on on our seller side, and now you have some really interesting interplies. Although the note I would make is our goal is not that that becomes a currency or an honest network.”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“You had some celebrity tweets that was tied to some celebrity tweet, but okay, but it's invented. It's out there. So, where does this go long term? So you kind of nodded when I said it feels banklike. What does this look like a couple years down the road?”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“And I could see it happen. That's the other thing, is most loyalty and rewards programs are things that happen a month later when you get your monthly statement. And what's beautiful about how they've enacted in the app is you actually right there and then see the total amount you were getting charged go down as you get that 10% off. So for us, it's just yet another way to grow that platform from the 7 million that you mentioned was as of the end of December and the app has consistently been the number one finance app downloaded at the App Store Google Play and it's gotten as high as I think number four or five in free apps. So it's becoming, we want it to be a daily use case.”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“You can. Yeah. I mean, I'm a CFO at heart, so I'm cheap. So last weekend, I normally get a boost a dollar off every coffee because that's what I do first thing in the morning to get going. But I was in Chipotle with my son, and I'm like, oh, oh, I haven't used my dollar today. I want to get my 10% off instead. And I could change it right there at the checkout.”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“So it goes back to that comment about utility. You've onboarded through P2P, so you've sent me $100, and we want to give you a reason to hold it sitting in that balance. So we gave you the card, we gave you the ability to do things like attach it to your routing numbers. You could put your paycheck in there. We allow you to take it to an ATM and withdraw cold hard dollars if you want to. With Boost, what we wanted to do was something completely unique. So if you have a debit card in the United States, it's unlikely you have any sort of loyalty program connected to it. But we wanted to give you in the moment savings because in our mind, that is yet another draw to it. So it's effectively in a marketing expense for us. We looked at where people are using it. So as I said, mainstream across all the brands you would expect. And so today you pick your boost of choice. And you can be really nimble with it. I was joking with...”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“So, the one feature that has actually gotten me to use this physical debit card that I don't gain any points for or anything is what you call boost, but it's essentially a discount, a merchant, well, mostly merchant-specific discounts. And right now, I think there's 10% off at Chipotle or Shake Shack, Whole Foods. And I looked at that and I'm like, those are big discounts. And it turns out right now you guys are funding these discounts. So how long can you do that for and why are you funding these discounts at the start?”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“So interestingly, our kind of real ground zero for it was Atlanta, Georgia, which speaks to a demographic that really needs to be served. But I think beyond that underbanked segment where we kind of began strategically, we've definitely seen now the rise of digital natives, like folks who want their banking type app or their financial app to kind of work with them to work on the device that they're used to using every day. And to start just, we're just adding more and more utility to it as the app itself becomes more prolific.”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“Like a bank account almost, yeah. It has a card associated with it today, so you get a beautiful debit card that you can take to an ATM. You can use anywhere that Visa is accepted. You can use it online and offline. And that's what people are doing. So in June, we saw 250 million dollars just on the cash app. Debit card, physical and virtual together $250 million, it's about $3 billion annualized. And they're spending everywhere you'd expect. They spend at Walmart, they spend at McDonald's, they spend at Uber, they spend at Netflix, it's all the big places that spending is happening. So it's really not just by the coast, although we love the coast too, but we actually see this being used really across mainstream America.”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“Some work to do on this. But cash up, don't worry. By the time you all leave, because I'm always hustling, you're all going to download it right now and try it out. So Cash App's premise really started out more with the underbanked, with a view that there are 30 million households in the United States that are unbanked or underbanked. It's kind of shocking. The thing we take for granted, the ability to get access to a DDA, a demand deposit account, they cannot get access to it. It's too expensive. They can't hold a minimum balance. They feel out of control when things like they go overdrawn by a dollar and they get charged $30. So cash app really came about beginning with P2P, but we said this is a way to bring people up and on the system. So it's very analogous to what we did with Square in the beginning, where we work with those small businesses who never got up onto electronic rails. And so it started as a P2P app, but very quickly we've shifted it to hold a balance.”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“For a while, the question was why even do consumer business, you've made some announcements about how big the cash service. I still want to call it Square Cash because for people who don't know, I still think it's confusing. Your Square Cash services Earlier this year, I think you said 7 million monthly users, active users. I find people on the coast, which are a lot of people I talk to day to day, they're heavy Venmo users. And so I get from a ton of people, who are those 7 million people? And I know you're asked this, but I'm going to ask you again, who are the people who are the... The daily users of that service”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“Lots of tuck-ins will look for great technologists, great data scientists. We'll look all over the world for that. That's much more of a talent acquisition vehicle rather than per se bringing on a new business.”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“We want to make sure underneath that the data layer is cohesive and a big part of our strength as a company has been the ability to, for example, take payment data and the point of sale and offer small businesses access to capital through our lending product, or be able to take data that's running in our digital receipt and turn that into a loyalty program. So the more we can keep cohesion of the data, the stronger the whole ecosystem gets. And so that's where when you do buy, you need to be careful that you can really integrate it in so that it's truly still a cookie.”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“No, no, for sure. I mean, when I joined about six and a half years ago, we're not that old as a company. We're hitting nine years. But there was definitely, we wanted to build it all end to end because we wanted to really control the experience. And if you think about Square in the early days, it was a beautiful experience. We really reinvented a kind of a nasty, couldn't get on the system. You had to work with all these different vendors. Instead, you came to Square. You got the reader. You were able to take the payment. You sent a digital receipt. And it was all for a single price felt really easy and transparent. But as we got bigger, to your point about how big can it go, we've recognized that many sellers are going to bring other pieces of that party to play themselves. And our goal is to work with the right partners to unlock for them. On the buy front, I mean, we haven't done a ton of acquisitions, frankly, as a company. We'll always look, but I think our preference is...”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“So, as you can imagine at our scale, so you mentioned Omni, and we really look at three pieces of our business, Omni, Banking Services and International. I'm sure you'll come to the latter too. But in every case, when we want to do something new, we think about build by partner. I think a big unlock for Square in the last probably three, four years now has been in a willingness to build this open platform. So there will be places where we do first party, and there'll be places where we do third party. In the Omnichannel vein, we have been working with Weebly, but also Wix, Big Commerce, GoDaddy, think about all of the website builders. And we do that because we recognize that our sellers want choice. And for some of them, one particular platform works better than another, and we don't want to tell them what they should do. We want to make sure it's open for them.”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“So you mentioned Weebly quickly, which I'm going to describe it as content software, but also e-commerce software company as well. That was an acquisition How are you making these decisions on acquisition versus partner as you try to fill all the parts of the ecosystem?”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“I would like their whole business. We see businesses that do $100 million plus on Square today, so we're certainly not capped from a size perspective. And then, of course, it's not just about a payment. I think our learning in the last few years and the acquisition we did of Weebly, I think, has really reinforced this, is commerce is a continuum, right? It usually starts with discovery, help people find my product, find my business, help them get educated to know what to buy. Then you probably move into a shopping cart sort of scenario where a payment gets taken. Then they want to do fulfillment, and then maybe there's a return or a refund that ends it. There may even be things like reviews and so on. So we want to make sure that we're thinking about that whole continuum. And on the API piece, we offer not just a payment API, but things like customers or inventory or an instant deposit, whatever the pieces of Square that are right for your”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“So I don't know if we see a cap anymore. We think we can go to the biggest businesses in the world. And one of the ways we've done that in the last few years is to really open up the platform and to build a series of APIs that anyone can code to. So if you want to do something innovative at your point of sale, one example sometimes I use with analysts is the North Face, they want to do a pop-up at a ski resort where I've lost my glasses or I really need a hat. It's a little bit colder. I want those hand warmers. We want to make sure they can enact commerce right there at the lift. And what they don't want to do is recreate their whole back end earpie system supply chain and so on. So in that case, they can just tug on an API from Square to help carry a payment. There are other examples where it might”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“Okay, and so that means we've seen over the years in your public financial reports that the percentage of your business that comes from merchants that are, say, 250 or 500,000 a year in annual sales keeps growing and growing. What is the end goal there? How big are you going after in terms of merchandise?”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“Of a sole proprietor that needs payments all the way to some of the largest brands in the world, there's a ton of space. So what we've seen in the US is today even 50% of businesses effectively don't take electronic payments. There's about 21 million small to mid-sized businesses that are open for business to get on the electronic rails. We see the same thing in the UK. About 1.7 trillion pounds of just revenue going across small business points of sale. So there's a lot of greenfield and every business from that sole prop all the way up to the Walmarts of the world knows that Omnichannel is in their future, that they're going to have to be in all those places. And so what gets us up in the morning is making sure we can handle all that commerce.”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT
“So, first of all, it's a massive space. So Omnichannel itself, the ability to take your payment, to actually enact commerce, whether it's online, offline, in a marketplace, on voice recognition, whether it's the lovely lady upstairs who was putting on some makeup for you, Jason, so I feel like I need to bring that up. But a great example.”
2018-09-29 · Decoder with Nilay Patel · Recode Decode: Square CFO Sarah Friar and Instacart CEO Apoorva Mehta · IDENTIFIED FROM THE TRANSCRIPT