蘑菇AV

Macroeconomic uncertainty and an overreliance on Cash App led the company to slash its full-year guidance

The newly rebranded 鈥淐补蝉丑 App Afterpay鈥� will help Block more tightly integrate its products into one ecosystem

Cash App launched a national marketing campaign highlighting its new banking products.

The service advances Block鈥檚 goal of 鈥渂anking our base鈥� and could drive Cash App adoption.

Ramping up marketing spend and integrating Cash App, Afterpay, and Square should put it in a stronger position in 2025

Square Loans, Cash App Borrow, and Afterpay were all bright spots that should yield longer-term growth

Block has been working to grow Cash App Pay, but the buy button still trails competitors

As younger generations use the P2P app for more of their banking needs, it鈥檚 still missing key financial services.

It wants to offer banking services to its four million Square sellers and the 54.9 million people we forecast will use Cash App this year. To that end, Cash App received FDIC approval in March to finance its Cash App Borrow loans directly to consumers through Square Financial Services鈥攁 crucial step toward launching larger lending operations.

Block began letting Cash App customers check out with Afterpay on partner merchant sites earlier this month. And also this month, Cash App received FDIC approval to finance Cash App Borrow loans directly to consumers through Square Financial Services.

Why this matters: 蘑菇AV 63% of Gen Z credit card users have switched to another payment method, per Cash App Afterpay. Gen Zers are trading down to debit cards or other alternatives like buy now, pay later (BNPL), potentially eroding payments volume, swipe fee revenues, and interest income for issuers.

Between buy now, pay later (BNPL) players like Affirm and mobile wallets like Cash App and PayPal, the number of fintech cards on the market is growing. Affirm Card gross merchandise volume (GMV) jumped 113% YoY in the quarter ending December 31, 2024. And the number of active Cash App cardholders increased by 1 million in 2024.

Cash App. Visa. Apple Pay. Venmo. Key takeaways: Gen Alpha鈥檚 preference for digital competitors likely means these payment apps provide the banking basics Gen Alpha needs at this stage. And that includes the ability to buy what they want, pay and receive money from friends and family, and save some money. They may not be interested in more complex banking services at this time in their lives.

Apple Cash Family lets parents load money into their children鈥檚 accounts and limit who they can send money to. Apple Card also has a family feature. Cash App lets teens make P2P payments and apply for its debit card with parental supervision. And Venmo鈥檚 Teen Account comes with a linked debit card.

The rule mandates that financial institutions (FIs), credit issuers, and payment apps like Venmo and Cash App must transfer consumer financial information to other providers for free at the consumer鈥檚 request. As it stands, large FIs with over $850 million in assets must comply with the rule by 2026. Smaller institutions have until 2030.

Robinhood is planning a cash-delivery service. Cash App launched a marketing campaign that highlights its attractive new banking products. Chime lowered the barriers for personal loans. Revolut鈥檚 new ATMs could take a swipe at a major competitive advantage held by traditional financial institutions (FIs).

What this means: Supporting crypto can help Klarna become a super app. It wants to be a one-stop shop for payments and commerce and to better compete with other digital wallets like PayPal and Cash App, which both also have crypto integrations. This move may also foreshadow a larger push into crypto from payment providers as they ready for the asset class to take off under President Donald Trump.

The agency also ordered Block to pay $175 million over what it claims was a failure to protect Cash App customers from fraud. Our take: We knew the CFPB鈥檚 recent rulemaking and other initiatives would be overhauled once Trump. But it鈥檚 unclear how its new agenda will shake out鈥攁nd how many of the agency鈥檚 rules that recently went into effect, such as regulating digital wallets like banks鈥攚ill survive.

In addition to trust issues, X Money will have to compete in a highly saturated market where consumers are already loyal to their preferred platforms, like Venmo, Zelle, and Cash App. This article is part of 蘑菇AV鈥檚 client-only subscription Briefings鈥攄aily newsletters authored by industry analysts who are experts in marketing, advertising, media, and tech trends.

Mine is that Cash App is, it's not really a number, it's more of a data point, so I hope that's okay. Rob Rubin (05:10):. All right. Grace Broadbent (05:20):. Cash App is Gen Z's second-highest ranked bank in terms of consumer banking satisfaction scores. The only bank that ranks higher than cash app is Bank of America.

Payment apps such as PayPal, Venmo, and Cash App have had to rely on QR code payments to give customers an in-store iPhone payment option. But this method has not caught on: Only 2.4% of in-store mobile phone-based transactions were made via QR code in 2023, per Federal Reserve Bank of Atlanta survey data. By contrast, NFC-enabled app and tap-and-pay payment methods garnered a 65.1% share.

The news: X (formerly Twitter) is planning its first marketing campaign since Elon Musk took over in 2022, including promoting its payment platform, X Money, which aims to challenge contenders like Venmo and Cash App. Musk鈥檚 campaign could contribute to a further resurgence of brands and advertisers.