Square COO Keith Rabois Departs Company

In a major exec departure, Square COO Keith Rabois will be leaving the San Francisco payments company.

Square gave no other information about the sudden management change, but sources said disagreements between Rabois and CEO and founder Jack Dorsey were part of the reason for his exit.

It’s not clear if there were more serious issues between them, or whether the parting was related to a specific business problem. But the departure of the No. 2 exec is significant, so definitely more to come on what happened.

In a statement about the move, Rabois only said:

It is amazing what Square has accomplished since August of 2010. When I joined, there were 17 engineers all reporting flatly to Jack. The local coffee shop served as our interview room. Leading our amazing crew has been the most rewarding professional journey of my life. I am forever grateful to Jack, for his confidence in me and to each and every member of the team for allowing me to learn from them. But every day matters. And it is better at this point for me to be doing something different every day. As a result, I’ve decided to resign from Square. I am very excited about what lies ahead for the company. Square could not be better poised for greatness. I will have more to share about my next opportunity soon.

Said Square’s Dorsey:

Today I accepted Keith’s resignation from Square. When he joined, we had fewer than 30 employees and under 1000 active merchants. Today, over 3 million individuals and businesses are able to accept credit cards with Square, processing over $10 billion annually. We couldn’t have done it without him and we wish him well in his next opportunity.

Square CFO Sarah Friar will become acting COO, Square said. It’s an unusual move to put an exec without a lot of deep operational experience in the second-most-important slot at Square, though the former Goldman Sachs analyst and Salesforce.com finance exec is clearly familiar with the heart of the company’s business.

The change in top management comes at a time of fast growth for the three-year-old Square, which completed a $200 million funding round in the fall that valued the company at $3.2 billion. At the time, the company said it had more than 400 employees and would grow by 100 more by year’s end.

Square is best known for allowing a range of small businesses, such as taxicab drivers, to accept credit and debit cards using their mobile phones. But it has also branched out into other mobile payments areas.

Besides his stint at Square, Rabois is a well-known angel investor in Silicon Valley, and serves on several boards, including Yelp’s. He has worked at many startups, too, including PayPal (acquired by eBay) and Slide (acquired by Google).