On Wednesday, mobile payments processing company Square filed for an initial public offering (IPO), although it kept how much money it plans to raise and how many shares it plans to offer confidential.

The filing, however, offers an inside look at the financials of the increasingly popular point-of-sale (POS) company, which has gained a foothold in a traditionally slow-moving market by making customers out of coffee shops and boutique stores that might normally only accept cash.

Under the “Risk Factors” section of the form that Square is required to fill out for the Securities and Exchange Commission (SEC), the company noted a number of concerns that potential investors might have, but one risk factor that stuck out involved how Square addresses fraud.

Broadly, with credit card fraud, issuing banks are on the hook for making good with defrauded customers, but as a transaction manager, Square holds some liability, too. "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,” the regulatory filing explained.

The company wrote: "As a greater number of larger sellers use our services, our exposure to material risk losses... will increase. For example, in the three months ended March 31, 2015, we recorded a loss of approximately $5.7 million related to fraud by a single seller using our payments services.”

The IPO filing gave no other details, and Square’s “seller” likely reflects a business with multiple storefronts rather than a single, unlucky coffee shop. Still, that giant fraud bill from one seller underscores how dramatically card fraud has been felt in the US. The issue has captured headlines since the databases of Target and Home Depot were breached in recent years, but clearly fraud is not limited exclusively to massive retailers.

To tackle this rash of card fraud, credit card networks like Visa and MasterCard are forcing card issuers and vendors to switch from the very insecure magnetic stripe card technology to the generally more secure chip-and-PIN technology, also called EMV. Square announced a device capable of reading EMV cards last summer, and this fall it plans to release a second-generation card reader that processes EMV and Near-Field Communication transactions from mobile phones as well. Square pushed to get its sellers to buy new EMV readers this summer, promising them that it would absorb any fraud liability that the sellers faced until the sellers’ new Square devices arrived.

Ars contacted Square for more details, but the company declined to comment.

The filing also reflects that, although Square is growing its revenue, it has also lost money in recent quarters. "For the six months ended June 30, 2015 and June 30, 2014, we generated a net loss of $77.6 million and $79.4 million, respectively,” Square wrote. "In 2014 and 2013, we generated a net loss of $154.1 million and $104.5 million, respectively.” Again in the filing’s “Risk Factors” section, Square admitted that it had an accumulated deficit of $473.2 million. "Our business has generated net losses, and we intend to continue to invest substantially in our business,” Square wrote, warning that its profitability was not a given.

Outlining its growth strategy, Square said it planned to continue to support new payment technologies like Apple Pay and Android Pay as well as EMV chip cards. Square also provides analytics services to companies, and the company pointed to that aspect of its business as a potential growth driver in the future, partnering with third parties like Intuit and Bigcommerce to leverage the data it collects.

Square says it will list its stock on the New York Stock Exchange and use the ticker symbol "SQ."