Square is close to going public, but it's facing major challenges, including a slew of competitors crowding the market for payments processing.
At small businesses, Square's magstripe reader might be the most recognizeable compared to its peers. It's the white, square gadget that attaches to a mobile device allowing small vendors to accept credit cards. Software linked to that device, as well as Square point-of-sale stands in stores, were used to process $23.8 billion in transactions last year, according to the company's recent S-1 filing with the Securities and Exchange Commission.
"I think the challenge is that each one of those individual businesses is pretty small, so how do you really scale if you're Square?" said Kamran Zaki, president of Adyen North America, whose firm helps process payments for Fortune 500 companies. "I think that volume and some of their revenue numbers seem to be slowing down in terms of growth rates."