Jack Dorsey is best known for co-founding Twitter, the micro-posting website that now has around 330 million users around the world. In 2009, the computer programmer also co-founded Square, which was originally designed to help small businesses accept credit cards.
Dorsey’s other San Francisco-based startup, known for its plastic card-reader dongle, has widened its footprint over the years. More than 15 million people use Square’s Cash App for peer-to-peer payments, and its lending business made more than $500 million in loans in the first three months of 2019. The company launched in the UK two years ago and has offered bitcoin trading since January 2018.
Square has had great timing: investors have been eagerly buying payment company stocks, encouraged by the mega-shift toward online commerce and electronic transactions. Square has also had missteps: the Wall Street Journal reported this month that the company inadvertently sent some users’ email receipts to the wrong people.
Quartz spoke with Dorsey at Square’s offices in London about his vision for the future of finance, bitcoin, the end of cash, and how to handle receipt mixups. The conversation has been edited and condensed for clarity.
Quartz: Do you have a prediction for the future of finance?
Dorsey: I don’t think there’s any one person who understands the financial system. All we can do is just look at the secular trends of what might impact it, and there are two big secular trends. A lot of our decisions are going to be more and more shifted to algorithms. And those algorithms also need to be able to explain why they made the decision they made, and what criteria they’re using.
As we think about finance and loans and mortgages and whatnot, suddenly what was a human decision, which may have had some subjectivity in it, becomes an algorithm, which might be more objective as long as we’re training these algorithms without bias, and on very clean datasets that are looking at a much broader audience and community.
They are black boxes. Right now they’re not being written in such a way that they can explain the criteria being used, or how they actually made the decision. I imagine that’s going to be a lot of the work is ensuring that algorithms can explain themselves, but also that they’re doing so without bias, which is a threat. That will have a significant impact, and if we fix those problems then I imagine that we will be able to increase the access because it will increase the velocity and therefore the scale.
What is the second trend?
The second secular trend is blockchain and cryptocurrency. And I guess the way I think about this is we have all these currencies for every nation state, but if you consider the internet to be the equivalent to a nation state, it will have a currency native to itself, and there is not going to be any one party or institution that makes this happen, and there’s not going to be any one party or institution that can stop it from happening. And having a global currency that is native to the internet will allow companies like ours to move much faster and reach a lot more people.
This is our one opportunity to align every community, and every country, around the world, which I think provides a lot of clarity, enables a lot more innovation, and most importantly creates a probability of much greater access for more people. As we bring more people online, we can also imagine a trend in parallel where they all have access to the same currency, and there are still conversions to a local currency like the pound, but being able to have one currency really takes away some of the barriers of the past and how we think about global markets.
There have been reports about a Facebook coin. Do you think that it could be the global internet currency?
All of them have been rumors, so I don’t know what they’re building and I don’t know the details. I’d have to see that to have an informed decision. But I would go back to, we need a currency for the internet. And the internet being an entity that isn’t controlled by any company or any one government, that is for the world and for the people of the world.
That is what I would want to help make happen. I would hope that all private companies can see the value of having a stateless currency that all people can access, and is not bounded or constrained by any one corporate entity.
Do you think bitcoin could be the internet’s currency?
I haven’t seen any other currency that would challenge it across the dimensions that I think are really important. First, I think it has an amazing brand. The other thing that I think makes it probably the strongest candidate is that the principles behind it are very pure. The creation of it was very pure, and focused on a public good, rather than any other particular agenda. The fact that it’s meant to be deflationary, meant to incentivize savings instead of spending, I think is a net positive for the world and how we think about consuming. Because it is a scarce resource, it has a probability of always increasing in value, which makes you consider a lot more how you spend it. Because you know that spending it today—it might go up in a week. And purchasing coffee, or a new sofa, with that really puts everything in perspective. Do I really need this? So from a psychological perspective, I think that’s interesting.
And finally, I think it’s been resilient. It’s 10 years old now, so it’s been tested over those 10 years, across every dimension from security threats, to governments, to forks, to agendas from miners, to nefarious nation states, and it’s been resilient to all those threats and challenges. And resilience is very valuable. There could be an upstart cryptocurrency that could challenge it, but it doesn’t have those tests and that memory of those challenges built into it.
The community around it is very passionate, and it’s been a dream for cryptographers for 30 or 40 years. So to realize something that is now usable, there’s just so many people who want to make it happen and want to make it better. And I think they do so with the right principles, I think they do so with the internet principles of having a connected world where anyone can participate and everyone has equal access. I think it’s quite powerful.
Last week there was a Wall Street Journal report about some Square electronic receipts getting sent to the wrong people. How widespread was that, and is it something you anticipate will happen in the future?
First and foremost, this is a rather new thing. Digital receipts is something we’ve believed in as a convenience. It’s something we want to make sure that people have a lot of simple control over and we need to constantly evolve this. We need to make sure we are providing the right controls, that people are getting the receipts in a place that they receive and intend to receive them. After we get more and more fine-grained identities that becomes even easier. In some cases people share cards, and there’s one identity per card. These are all things we can fix.
But these are new experiences. So we’re going to run into things like this, and our job is to make sure we adapt to them very quickly.
Do you personally carry cash?
Only in markets where it’s still dominant. I mean, Japan is still cash driven. That’s changing very quickly…
The government wants it to.
The government is incentivizing both sellers and consumers to move in this direction through direct subsidies and whatnot. And then you have the 2020 Olympics coming up where you have this global audience coming in, and intending and expecting to pay in a way that they pay every day at home. So that’s changing quite quickly.
But generally, no. In the US I don’t carry cash at all, and I don’t really require it here at all, and everywhere but Japan I haven’t really needed it. Do you?
Not really. It’s nice to have as a back up. Last night, I was at a corner shop and their payment machine was down and there was an ATM around the corner.
It’s inconvenient. It took us a long time to convince folks in the United States, especially small businesses, of the inconvenience of it. And it’s actually more costly than accepting credit cards and digital payments because of theft and having to go to the bank and storing it and all these other dynamics that people don’t necessarily think of.
And the most important cost to it is missing sales. If you can’t accept a credit card, you have a high probability of not doing what you did: not going to an ATM but just leaving and going to another place.
And that seems like it’s changing globally. You see fewer and fewer ATMs because there’s less need for cash because so many stores have been digitized.
It makes sense for governments to preserve cash, even at a loss, for a long time to make sure that it’s there for the redundancy, and to make sure it’s there for people who are left behind.
I don’t think any of this stuff goes away, ever. Because I think the whole financial system works because there’s a graceful degradation. Even credit cards, when they were first introduced, you know, you have a magnetic strip on the back, and you have the chip, and you typically have raised numbers.
So if the magnetic strip wore off, you could still do an imprint of the number, and if that wore down then you can still read the number. So the whole system is designed to gracefully degrade to the lowest common denominator. And that’s probably how we’ll see cash. It’ll be the lowest common denominator, and a back up, but the predominant usage will be digital, and probably not even the plastic cards that we’re using.