Jack Dorsey, co-founder and chief executive officer of Square Inc., talks about the mobile-payment startup’s growth, Square Wallet app, entrepreneurship and his leadership style. He spoke with Bloomberg West’s Emily Chang yesterday in Detroit, Michigan for his first one-on-one interview since announcing Twitter’s IPO.

On why he went to Detroit:

“I love the Detroit. My father runs a small business. He builds machines for – for medical devices. And he’s spent a lot of time up here. He had a lot of contracts up here and a lot of clients up here. So he’s – he’s come up here every other month. And he always told me so much about the city and I’d never been to Detroit except for last year for the Techonomy conference.

But it has a really deep soul to it. And it’s – the attitudes of the people are just so great… It’s a very entrepreneurial and it’s a city of innovation and invention and massive, massive success. It’s right down the street, the Henry Ford museum. So there’s a real highlight innovation in this city and it’s finding itself again.”

On how Square can help cities like Detroit:

“Well I think the biggest thing is we have a responsibility to build simple tools for merchants and sellers to grow their business, but also the responsibility to give them a start of a conservation. And the Let’s Talk events gets a bunch of merchants together around the city.

We have about 600 people coming tonight to just talk about what works, what doesn’t work, what the challenges have been, how to get new customers, how to retain those customers that you find, and just mistakes and tricks and tips along the way.

It’s one of the things I love so much about Silicon Valley and San Francisco, is there’s this culture of mentorship, of support around entrepreneurship. And the attitude is here and the entrepreneurs are here. And just starting that conversation again, building that fabric and building that venue to keep having those conversations.”

“And we see the same problems no matter how big the company is. A Twitter, a Facebook, an Instagram, a Vine, a Square, the coffee store around the street. They’re all worried about the same things. How do we get new customers? How do we retain those customers?

How do we advertise? How do we – how do we hire people? How do we part ways with people that aren’t working out? How do we think about building a team? So we’re just showing what’s worked and what mistakes we’ve made.”

On how Square deals with regulatory issues in the United States:

“Well, as long as it’s driven by the people that are using it and they’re really going to see how long they’re talking to the regulators and saying like, I want to use this. This is something that is important for my business.

It’s important to me because it’s part of my business…We help support it. So at a lot of our Let’s Talk events we’ve had local government there. So at the last St. Louis event we had the mayor there.

We had a bunch of aldermen, a bunch of city councilors, and they were engaged in the conversation. So we love to work with city government to help change these conversations and make it easier for people to build their businesses.”

On where he is seeing the most merchant adoption today:

“It’s really still in the small brick-and-mortar who are growing from an individual to multiple employees and growing from one location to multiple locations. So we have tons of retailers and tons of coffee stores and salons and all these other things that started very, very small but are now growing.

So more and more we’re seeing a lot of brick-and-mortars use it, a lot of the neighborhood stores use it. And they’re getting a lot of value out of because it’s one simple system. So they plug in an iPad here and then the business grows, and then they have two cash registers and then they have three, and it keeps growing and growing and growing.

And then they want to sell online, so they flip a switch and suddenly we built a page for them on Square Market and they can sell anyone anywhere across the nation right away within an instant.”

On the latest number of users and money Square processes:

The last number we gave was over 4 million. And that’s inclusive of independent sellers and also brick-and-mortar merchants. We’re processing over 15 billion annualized from just small merchants. That’s not with Starbucks. So it’s a very, very large number. And it’s a big part of our economy, and we see it growing.”

On whether Square loses money:

“Our philosophy has always been we’re always going to accept whatever payment comes over the counter. So if it’s cash, if it’s a check, if it’s a charge card. And what we wanted to do is to make the charge card simple so that you never have to think about the interchange, the varying degree of rates that you have to pay potentially as a merchant.

So we hide all that math and we just say you pay 2.75 percent. Your money is going to be in the bank account the very next business morning. And that’s all you have to worry about, so you can actually predict your business. And in the background, that means we have to do whatever we have to do for those cards. But we’ve been able to build a growing business out of it.”

On how Square overcomes the money they lose in the process:

Technology helps us reduce the cost in the system, and we want to continue to drive down that cost in the system. And that’s just better technology around understanding the risk…And that’s where a lot of the charge and the costs of the system comes in, so we can drive that down.”

On whether bigger merchants like Starbucks is still a focus:

“Well, the greatest thing about Starbucks was they came to us. We don’t necessarily have a partnerships team which goes out to all these larger merchants. Starbucks and Burberry came to us and said we want to use Square because you focus on the customer experience and we know that that drives more people to our stores.

So they’re using the application that all of our other merchants are using. And that’s meaningful to us. We want to build utility that scales from small to large.”

On whether Square will ever give a break on the 2.75 percent fee to compete with credit card companies:

“We’re always looking at pricing. We’re always looking at scaling pricing. And we always want to continue to drive that down, but we don’t see ourselves building a payments company.

We see ourselves building a commerce company, and payments is just one tiny little part of that. And the cost of payments is also one tiny little part. We think the significant value that we add is really around the analytics, around the data, around simple things to enable you to build your business up and make decisions around how to build your business up.

So whether you’re very large or you’re very small, these things are meaningful. And it’s an order of magnitude more important than – than just the payment and potentially some of the cost.”

On whether Square plans to integrate with point-of-sale terminal providers and hardware makers:

“Well we’re always looking at those opportunities, but we want to provide something that’s very seamless, that’s very easy and that’s comprehensive. And a lot of our competitors are looking at various parts of the system.

And if someone’s doing a point of sale system, someone’s building a credit card terminal, someone’s building loyalty in coupons, someone’s building analytics, we just decided that wasn’t for us because there’s all these seams. And the customers coming into the stores see all the seams, and it actually slows down the transaction and it slows down commerce.

If you build the entire thing end to end, then you can actually speed up commerce and you can have more of it. You can have more customers and you can retain those customers as well.”

On whether we will see Square hardware like the reader in Starbucks:

“We’d definitely like to see it more and more places, but our focus right now is on the smaller folks and the – those going to medium-sized retailers, going from one store to 10 stores. That’s where we think it fits perfectly and that’s what we’re focused on.”

On why he was at Apple’s September 10th iPhone event:

“I like Apple. And I was invited down to look at their new technology and I thought it was exciting. New technologies like that enable companies. And I think we’ll see a lot of innovation from the platform that Apple continues to build.”

On whether he has tried the fingerprint sensor yet:

“I haven’t tried it.”

On what Apple’s fingerprint senor may mean for Square:

“Well, I think people are always quick to jump to authentication and payments. But if you think about everything that we carry on our phones these days, there’s a lot of sensitive information and a lot of personal information. And the phone carries all of that.

And if you have a way to protect it in a better way, in a more human ways, which I think is really the – the intention of the fingerprint. It’s not necessarily better security but it’s just more human and more natural and more organic. You protect all that. It’s not just about payments. It’s not just about your pictures or your email or whatnot.

You want to protect all these things. So I don’t jump to that conclusion of like because there’s a fingerprint sensor you immediately go into payments. I think that’s one tiny little aspect of what people might do with that – with that device. So for us it means that people are protecting their phone in better ways. And if it’s turned on by default, that’s great. That means mobile wallets like Square Wallet are protected naturally with a very human interaction.”

On Square’s relationship with the government:

“We talk with them mainly around building small businesses and the economy. And that’s been the extent of our conversation. I think security more or less is really an evolution. It’s not a destination and it’s constantly evolving along to something that’s better and people have better controls over and they can understand more and so we’re always 10 steps ahead from someone who’s trying to break into that security.

So that’s what we’re focused on right now. Our interface and the government is like let’s really stabilize and prop up and grow the small business economy because we see it such a growth mechanism for the national economy. We see it’s so, so important. Square alone is processing 15 billion in the small business economy in the United States.”

On whether the government asks Square for information and if so, how do they handle those requests:

We have specific policies. And it’s not just a Square conversation. It’s also we enable credit card transactions, so a lot of this is with Visa and with MasterCard and with all of our partners and the banks behind us and the banks that are issuing the cards. So it’s not a single party that would have to go through one request. But we’ve not had to deal with that just yet.”

On Square Wallet:

“It’s something we really love. It’s something we want to see more of in the world. We believe it is the future. It’s something that we now see our competitors doing similar things to. But people – it’s a behavior. It’s a new behavior. And those who find it and download it and use it, they use it nonstop and they use it at all their favorite Square merchants.

And we love it because you download it, you link your credit card once, and you leave your phone in your bag or your pocket and you walk up to the counter and say, I’d like a cookies and cream ice cream, and just put it on Jack. It’s like opening a tab with the entire city, or at a sporting event or at a farmer’s market.”

On whether we can put everything on Jack:

“I actually have to be there. I’d have to be there, but – so we see it as something that’s easier and more secure and just more human. And we definitely think it’s the future. It’s just a matter of time. And we’re working really hard to accelerate it.”

On international expansion:

“We’re looking. We want to make Japan successful. We want to make the US successful. We want to make Canada successful. And we’re learning a lot.

We’re not like the typical technology company where you can just release it and the world can use it, and then you translate and you see this amazing growth. We actually have to have relationships within each market with the acquiring banks and the issuing banks.

On when Square plans to go to China or Europe:

“We love China. It’s really just a question of serializing these markets first and learning from each one of them, and as we get better and better and going to more markets in the world. But we’re looking at so many of them, and then we’ll decide.”

On how Square can penetrate the European market who relays on chips and PIN cards:

“We’ve always – we’ve always had the idea of any form of payment that comes over the counter, the merchant should be able to accept because that means they’ll never lose a sale.

And in Europe, that means accepting chip and PIN. And we will have to answer that, and we’ll have to answer it in the US as well because chip and PIN is definitely coming to the US eventually within – within years. So we’ll – we’ll have something that answers that question.”

On Keith Rabois:

“It is always a big loss when you lose anyone in the company Keith was transformational for us. He came in as employee 26 and had a dramatic impact on the company. I think of a great company of having multiple founding moments. The original one, the original founders.

A company will only thrive if it has multiple founding moment and Keith has provided one in the company. We are going through another one with some of the folks we just hired. This is natural for companies. We took Keith away from a career in investing.”

On how competitive is it out there for new talent:

“More competitive than ever. Extremely competitive… I think a lot of people put emphasis on the founding moment and being an entrepreneur. I think one of the things to remember is entrepreneurship is not necessarily about starting a company. The definition of the word is to take risks in order to do something meaningful.

So you don’t need to be an entrepreneur, you don’t need to start a company to be an entrepreneur. We explained this message to a lot of people we are talking to. We are going to lot of campuses talking about how we are entrepreneurs, building tools.”

On his leadership style and his role as CEO:

“I approach my role as an editor, borrowing from your industry, and I have three main jobs I have to pay attention to. One is editing the team, making sure we have the best team coming into and staying at the company.

And also parting ways with the folks that the relationship does not make sense anymore; that is one of the hardest things to do, to part ways with folks. Second, is the internal communication, how we work with each other and the external communication, which is the product or service itself.

We want to tell an epic story in the world and a cohesive story, too, so we think about the editorial line of that, making it simpler. Three is keeping money in the bank and editing that story as well.

The editorial conflict has always worked really well for me because just the word ‘edit’ means to take away, to simplify, and really get down to the essence, and I always want to do that as an individual and on anything I worked on.

On how he balances the value he raises money and what he takes into consideration:

Just fairness. The market decides. We have conversations with would-be investors and talk about what we would like to see and what we are going to build and how valuable it is to us and what we think the value of the company is, and they give us feedback. It is an honest conversation, and we want a fair deal for both sides.

That is how we go into it, and that will mean better service for our employees. We do not think about these as goals. We think about them as milestones. These are things we have to get through.

We have to keep money in the bank so we can continue to build our network. And I want to spend as little time as possible on it so we can focus on building the company and building the product for all of our customers. “

On whether Square is going public:

“We do not think about that in the company. We think of this as a milestone. The best you can do it build some discipline within the company to be ready at any moment to go through another one of those events, and an IPO process is like any other process of fundraising. It is a fundraising event, and it should be seen as such. It is not a goal.

When you reach goals, you stop. This is something we will continue to build as we continue to build. Right now, we are building the practice within the company. Square is ahead of a lot of companies in that regard because we are building a financial company, so we have to put a lot of discipline into the company to start with. That just becomes easier and easier and easier for us.”

Interview courtesy BLOOMBERG TELEVISION.

Image courtesy Art Streiber