Square suits up for battle

June 13, 2012, 1:00 PM UTC

FORTUNE — Square, the fast-growing mobile payments startup, is beefing up its management ranks as it faces intensifying competition from a number of well-heeled rivals.

The company said Wednesday that it hired Salesforce.com (CRM) executive Sarah Friar to be its chief financial officer. Friar served as senior vice president of finance and strategy at Salesforce, and previously worked at Goldman Sachs (GS) and McKinsey.

Friar is the latest in a series of executives to join Square recently, as its founder and CEO Jack Dorsey rounds out the company’smanagement team. Earlier this year, Square tapped Ricardo Reyes, a veteran of Google (GOOG) and Tesla, as its vice president of communications and brand marketing, and Jesse Dorogusker, a former Apple (AAPL) executive, as its vice president of hardware. But the company also suffered a high-profile defection earlier this month when Megan Quinn, its director of product, left to join venture firm Kleiner Perkins Caufield & Byers.

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Square, which has introduced a number of mobile payment products and apps for consumers and merchants, is best known for its while plastic credit card readers that plug into mobile devices and allow just about anyone to accept credit card payments. The popularity of those devices, which are now used by more than 1 million individuals and merchants, has turned San Francisco-based Square into one of tech’s hottest startups. The company says it is currently processing transactions at an annualized rate of $6 billion, up from just $2 billion late last year. It has grown from 80 employees to over 300 in the past year.

“I’m thrilled to join a company driving meaningful economic growth while revolutionizing the payment experience for consumers,” Friar said in a press release.

But Square is also under attack from a growing number of deep-pocketed competitors. In recent months, eBay’s (EBAY) PayPal unit introduced a competing card reader for mobile devices as well as a set of apps that mimic the functionality of Square’s apps. VeriFone, the giant maker of point of sale terminals, followed suit with its own card reader and a new business unit that is going after the same kind of mom-and-pop merchants that have been Square’s core market. And others, like Groupon (GRPN) and Google, are said to be close to introducing products that will directly compete with Square’s.

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Square, which has already raised about $140 million from investors, has been seeking an additional $250 million or so at a valuation between $3 billion and $4 billion, according to people familiar with the situation. But its fundraising efforts, which have dragged on for more than two months, have slowed further following Facebook’s (FB) troubled IPO, which has made some investors less willing to pay high prices for stakes in private companies, these people said.

Square declined to comment on its fundraising efforts.