Square Inc. said it quadrupled the money it sets aside to cover loan losses after the coronavirus pandemic and the economic crisis sparked a steep drop-off in parts of its business.

The financial technology company run by Jack Dorsey said gross payment volume, the total amount of all card payments processed by Square sellers, was US$25.7 billion compared to analysts’ estimates of US$26 billion. The company’s loss for the quarter totalled US$106 million. Analysts had estimated losses of only about US$34 million.

The stock sunk by as much as eight per cent in after-hours trading.

“During the last two weeks of the quarter, our seller ecosystem experienced a significant slowdown,” the company said Wednesday in its shareholder letter. “The macroeconomic environment remains uncertain.”

Transaction and loan losses, which account for fraud as well as bad loans, were US$109 million, a 291-per-cent increase from the year earlier. The company said that included additional reserves of US$79 million for transaction losses and US$22 million for outstanding loans in its Square Capital business — a fourfold increase compared to the fourth quarter.

One bright spot for Square was its peer-to-peer payments app, called Cash App, which added its largest number of new customers in April.

That helped the San Francisco-based company report revenue of US$1.38 billion in the first quarter, topping analyst estimates.

“Customers have used peer-to-peer payments, our primary customer acquisition tool, in new and powerful ways as they adapt to Covid-19 shelter-in-place and social-distancing measures,” Square said in its letter to investors.