On October 14, 2015, the mobile payment company Squarepublically announced that during the summer it had filed paperwork with the Securities and Exchange Commission to make an initial public offering. Neither the launch date nor the share price has been released yet.

About 97% of Square's business comes from processing credit card payments, primarily from small businesses. It also offers payroll, scheduling, analytics and marketing services. Though private investors set the company's value at $6 billion in 2014, the IPO announcement is accompanied by some concerns.

At a Loss

Square amended its SEC filing on October 26 to reveal that the company lost $53.9 million in the third quarter of 2015. This is the largest announced loss since 2013's fourth quarter, when Square began disclosing quarterly results. That brings the year to date total loss to $131.5 million. If the pattern continues, Square may well exceed its 2014 losses, which were $154 million. That was also up from about $100 million in 2013.

Up and Down

Although Square's transaction revenues have been growing annually, so have its expenses. Square doesn't connect directly to credit card companies and banks; it relies on acquiring processors. When Square pays fees to those entities, it loses about 60% of the revenues. For instance, in 2014, Square's revenue was $707 million -- but transaction fees ate up $450 million.

Losing Proposition

What seemed like a giant step forward in 2012 turned into a financial stumble. In that year, Starbucks invested $25 million in Square, which became the store's payment processor. The good news: Starbucks transactions gave Square $342.2 million in revenue. The bad news: those transactions cost Square $421.8 million.

Starbucks is transitioning to a new processor, so those losses will soon stop. However, Starbucks transactions have also been responsible for a sizable chunk of Square's revenue, about 11% in the first six months of the deal. So, as Starbucks pulls away, both losses and transactions will be affected.

Complicated at the Top

Jack Dorsey is a busy, busy man. Not only is he CEO of Square, but the week before the company's IPO filing he became permanent CEO of Twitter, as well. Twitter is publically traded, and Square is soon to follow. Does Dorsey have enough time to helm both? Square's IPO filing even admitted that the double role may take significant amounts of Dorsey's time and energy away from the payment company.

Facing Competition

Square currently handles transactions for about 10% of American small businesses. But there are over 80 other companies that perform the same function. These include PayPal and Amazon's Local Register. Unfortunately for Square, it's not the least expensive, and it doesn't offer the most features. This might keep Square from expanding, and the company could even lose some of its current market share.

On the Other Hand

Square faces challenges, but it does have some things going for it. Though the losses are up, other financial aspects are rosier. Total revenue was $552.4 million in 2013, and it increased almost $300 million in the following year.

Also, running Square is not a solo effort. Dorsey has his hands full as CEO of two companies, but he has a lot of support. He's surrounded himself with experienced leaders from other tech companies such as Google, Apple and Amazon.

As recently as October 19, Square revealed that it hired Jacqueline Reses, Yahoo's former chief development officer. When Dorsey is busy with Twitter, Square won't be languishing.

Dorsey also has assistance with the IPO. Goldman Sachs, Morgan Stanley and JP Morgan Chase are helping oversee the process. They played the same role in Twitter's public offering, as well. Again, a lot of experience to draw on.

The IPO could be important for Square's growth, but 2015 has not been kind to tech IPOs. They've been some of the poorest performers. In fact, the year has seen fewer IPOs overall. If the market doesn't appear strong for Square's offer, the company could delay its offering.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.