Payment company Square is expected to take a big financial hit because of the coronavirus pandemic.
The company will collect far less from its largest group of customers, small and medium-size businesses, which pay fees based on their sales. Some of those are restaurants, bars, and shops that are either closed or in crisis, and therefore handling fewer transactions.
As a result, Square could see as much as a 61% drop in first-quarter revenue, according to Mark Palmer, an analyst with investment bank BTIG. Although the company should be able to survive the pandemic, it will be painful, he says.
“It can withstand a downturn,” Palmer says. “With that said, we are anticipating that the company is going to see a very steep drop.”