Square has added another high-ranking female executive to its senior management team—Jackie Reses, who is stepping down as Yahoo’s chief development officer to lead Square Capital, the payments company’s lending division.
Reses, who had been at Yahoo since September 2012, also served on the board of Alibaba and is part of the Federal Reserve Bank of San Francisco’s economic development council. At Yahoo, she served in a number of roles, including heading up the company’s highly active M&A division and leading the spinoff of Yahoo’s Alibaba assets. With that arduous endeavor coming to a close, it looks like Reses was ready for another role.
“Jackie’s understanding of the financial services industry and her background in tech and investing make her the perfect fit to lead Square Capital, and I’m thrilled she is joining our leadership team,” Square (and Twitter) CEO Jack Dorsey said in a statement about the hire.
Reses’ hire comes with two other announcements: Henry Domenici is coming over from Morgan Stanley to lead Square Capital’s financing, and former Amazon Lending executive Ted Kosev will be leading the Square division’s product management and operations.
Businesses that want to borrow from Square Capital need to be using Square to process payments. Square in turn uses the transaction data to determine the creditworthiness of its potential borrowers; if a merchant qualifies, Square simply sends off an email saying the business is eligible to borrow a certain amount from Square. Requested funds are then sent to the merchant’s bank account, and Square gets paid back by processing transactions at a higher rate than normal, which varies depending on the business.
Square Capital solves a few pain points for small businesses. Borrowing from banks can be a tedious and time-consuming process. Square Capital fixes that by simply lending out the money as a cash advance and sending it directly to the user’s account. Square also is betting that having direct insight into a merchant’s cash flows will allow it to more accurately gauge how much money to lend the merchant, and at what rate.
While Square Capital has been growing well since it was launched in 2014, the service still hasn’t made a big dent Square’s bottom line. The company’s IPO filing showed that Square Capital, among other software services the startup sells, accounts for only 5% of the company’s revenue. Reses surely will be tasked to make Square Capital a bigger contributor.