Dorsey's Payment Company Files For IPO

The mobile payments firm founded by Twitter (Xetra: A1W6XZ - news) pioneer Jack Dorsey lost $6m (£3.8m) as a result of fraud carried out on a single retailer, it has been revealed.

Square - which provides point-of-sale technology to businesses - revealed the loss in the paperwork which accompanied their initial public offering (IPO).

The document said: "When our products and services are used to process illegitimate transactions, and we settle those funds to sellers and are unable to recover them, we suffer losses and liability."

No other details about the fraud were released.

But the fraud cost is a drop in the ocean compared to the company's overall losses - Square generated a net loss of $154m (£99m) in 2014 and $104.5m (£67m) in 2013.

It (Other OTC: ITGL - news) said a deficit of $473m had been accumulated.

Square warned that profitability was not a given in the short-term, adding: "Our business has generated net losses, and we intend to continue to invest substantially in our business."

The company could be formally listed on the New York Stock Exchange in just over a month.

It may face a tough time - this year has been the slowest for tech IPOs in the US since 2009.

Mr Dorsey is pursuing the listing just days after he took on the role of Twitter chief executive.

He returned to the company after being forced out several years ago.

He is Square's chief executive and biggest shareholder with a quarter of the company's equity.

In a letter included in the prospectus, he said: "We’ve built one of the fairest and most efficient payments businesses in the world."

Other investors include former basketball player Earvin 'Magic' Johnson.