The unexpected announcement late Monday that Square chief executive Alyssa Henry is leaving the company and being replaced by founder Jack Dorsey raises tough questions about how the strategy and direction of the huge point-of-sale payments company might change, experts say.
Dorsey, a key founder of what was then called Square and now chief executive of the parent company Block Inc., will replace Henry upon her departure Oct. 2, Block said upon announcing Henry’s decision to leave. Henry, a nine-year veteran of the San Francisco-based company, has run the Square unit only since February.
Observers credit Square for its pioneering accomplishments among small sellers, though Henry’s unexpected announcement raises questions about the direction of the company. Some company watchers are cautiously optimistic. Square “is a solid going concern, it works well, with a solid product,” notes Cliff Gray, a senior associate at TSG (formerly The Strawhecker Group), an Omaha-based payments researcher and consultancy.
Block reported in August that Square had processed $54.2 billion in payments in its June quarter, up 12% from the same period last year and fully 40% over the 2021 result. “With Dorsey, I don’t see Square’s strategy and growth tactics changing much. He’s clearly proven he’s a sharp guy,” Gray says, adding Dorsey’s history with the company indicates he won’t struggle to run both Square and its parent, Block, which also includes the company’s Cash App and blockchain businesses.
But Dorsey will have his hands full running both Block and its Square unit, some say. In the time since he stepped away from running Square directly, point-of-sale processing has become markedly more competitive, experts add. “The situation has really changed. Volume is down and margins are thinner,” notes Thad Peterson, a senior analyst at the consultancy Datos Insights.
But for all its success with small merchants, including its original base among cash-accepting street vendors, Square has stumbled in recent times. A well-publicized outage earlier this month shut down processing for hours for an untold number of Square-using merchants, many of which took to social media to complain of poor customer service.
Some observers suspect a link between the outage and Henry’s decision to leave the company after only a short stint in charge of Square. “My suspicion is the outage was a second yellow card for her,” Gray says. “Yellow card” is a reference to soccer penalties, where a second such card from an official against a player results in the expulsion of the player.
Aside from its other impacts, the outage will complicate Dorsey’s new responsibilities by attracting rivals to pick off Square merchants, Peterson points out. “All of a sudden it’s a challenging situation,” he notes. Still, he adds, “I wouldn’t underestimate the guy.” Dorsey was instrumental in creating a new parent company, Block, in 2021 to house Square, Cash App, and other services.
For her part, Henry characterized her departure on social media as a retirement. “After 9+ years at Square and 30+ years working, I’m retiring. It’s been an amazing and fulfilling ride,” she posted late Monday on X, formerly Twitter. Henry came to Square in 2014 following long tenures at Amazon.com Inc. and Microsoft Corp. Digital Transactions News was unable to reach immediately a Block spokesperson for comment regarding Henry’s departure.