Eva Marie Uzcategui/Bloomberg
Alyssa Henry, longtime CEO of Square, the merchant-services unit of Block, will leave the company at the end of next month and Square founder Jack Dorsey will assume leadership, the San Francisco startup announced Monday in a regulatory filing.
Block did not say why Henry, Square’s chief executive for nine years, is leaving. She served in various capacities at Square and previously worked at Amazon and Microsoft. Block’s stock fell about 5% in after-hours trading.
“While Henry’s departure will naturally raise questions, this seems consistent with the recent trend of fintech industry executives moving on post-pandemic,” Tien-tsin Huang, a senior analyst at J.P. Morgan, said in a research note Monday afternoon.
Huang said there is no indication Henry has a similar job lined up in the tech sector, and J.P. Morgan’s equity analysis team says it’s confident about the immediate plan. “We like that Dorsey is stepping in to lead Square strategy directly,” the note said.
“After nearly 10 years with Square, Alyssa Henry will be leaving the company,” Square said in an emailed statement. “As CEO of Square, Alyssa Henry helped transform the business into a software-led technology company, guided the team during the uncertainty of global pandemic lockdowns, and expanded our breadth of services for small businesses around the world. Square is what it is today in large part because of Alyssa’s leadership, and we wish her the best in her future endeavors.”
Early this month Square suffered a system outage for more than a day that affected many businesses that use its services. The event, which began Sept. 7, generated hundreds of queries on social media, and four days later Square apologized for the crash and the length of time it took to bring systems back online.
According to Huang, impact from Square’s recent outage should be “manageable,” based on conversations J.P. Morgan analysts had with Square earlier on Monday before the CEO transition was announced.
The payments industry is undergoing changes. After five years of steady expansion, with revenue growth averaging about 8% annually, the pace of growth is slowing. Fintech equity funding shrank from a range of $5 billion to $8 billion per quarter during 2021 to $1.4 billion through the first half of this year, according to a new report from Boston Consulting Group.
More leadership churn may be ahead. Stock market observers were recently surprised by the sudden exit of longtime Discover Financial Services CEO Roger Hochschild, whose departure was announced Aug. 14 after the disclosure of a wave of corporate compliance issues.
Dwolla, another startup that has been through many pivots in the fast-growing payments industry, last week announced a new CEO.
Square has steadily added to its banking services since rolling out a debit card five years ago.
In collaboration with American Express, Square debuted a credit card in June targeting business owners seeking access to credit lines based on their sales volume if they use Square’s merchant-processing services.
In his research note, Huang said Square has targeted sales in specific industry niches, a strategy he expects will pay off next year.
