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UPDATE 2- Square beats expectations on higher transactions

(Adds details from earnings calls)

Aug 2 (Reuters) - Payments company Square Inc, reported a better-than-expected 26 percent jump in quarterly revenue on Wednesday, as larger businesses used its technology to process transactions and it expanded the range of financial products it offers.

The San Francisco-based company, led by Twitter Inc Chief Executive Jack Dorsey, posted a loss of 4 cents per share on revenue of $551.51 million.

Analysts on average had expected a loss of 5 cents per share on revenue of $536.27 million, according to Thomson Reuters I/B/E/S.

Square's flagship technology enables small businesses to accept credit card payments through mobile devices. Its product has grown in popularity because it allows smaller merchants to process credit card transactions without a cash register or expensive systems.

The company, which went public in 2015, has been seeking to diversify its revenue stream by attracting larger merchants and offering more diverse services to its clients, ranging from loans to payment cards.

The company's gross payment volume - the total dollar amount of all card payments processed by sellers - jumped 33 percent to $16.4 billion.

Payments from its largest merchants, those processing more than $500,000 in transactions annually, grew 61 percent year over year, making up 19 percent of total processed, up from 14 percent a year ago.

The company has been launching products better suited for large sellers, expanding its sales and support teams and raising awareness among bigger businesses, Chief Financial Officer Sarah Friar said on a conference call.

Square Capital, the company's business which offers loans to customers in exchange for a fixed percentage of their daily card sales, originated $318 million in loans the second quarter, up 68 percent from a year earlier.

The company uses data on the payments it processes for its merchants to assess their credit-worthiness.

"We're serving merchants who typically would go to their friends and family to get the sizable loan ...," said Dorsey on a call with analysts. "We think that's a massive opportunity and no one else is really going after it, especially with all the data that we have so we can make really calculated judgments and decisions around it."

The company said it had secured new investors to fund the loans including investment manager Canada Pension Plan Investment Board, Canadas largest pension fund manager.

It launched a pilot in June for a service that will allow its merchants to allow their clients to purchase products and services in installments.

Square raised the low end of its full-year revenue guidance to $2.14 billion from $2.12 billion, keeping the top end unchanged at $2.16 billion.

Shares of the San Francisco-based company, which have risen 94 percent this year, dipped slightly to $26.30 in after-market trading on Wednesday. (Reporting by Anna Irrera in New York and Sruthi Shankar in Bengaluru; Editing by Maju Samuel, Bernard Orr)