Visa Takes 10% Stake in Payments Startup Square

Visa Inc. has taken a 10% stake in Square Inc., making Visa one of the mobile-payment startup's biggest shareholders.

Visa disclosed the stake in a regulatory filing on Thursday.

Shares of Square jumped 14% to $9.84 in premarket trading, while Visa shares rose 1.3% to $69.35.

Visa would become Square's second-largest shareholder behind mutual-fund giant Capital Research and Management Co., which has a 12% stake in Square, according to FactSet data.

Square, which was founded and run by Twitter Inc. Chief Executive Jack Dorsey, went public in December at $9 a share, below its expected range.

The company's stock closed Thursday at $8.62 a share, a 4% discount to its offering price.

Square got its start with a small piece of plastic that plugs into smartphones and lets anyone accept payment via credit or debit cards.

But its stock has been hurt by a weak market for initial public offerings, and concerns about the sustainability of the company's growth, on top of global market turmoil.

Visa, meanwhile, has focused more on digital efforts lately as consumers increasingly migrate to electronic payments.

The company has launched Visa Digital Solutions, an initiative geared toward secure payments using mobile devices. It also has supported Apple Inc.'s Apple Pay service.

Write to Chelsey Dulaney at [e-mail]

(END) Dow Jones Newswires

February 12, 2016 09:35 ET (14:35 GMT)

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