In 2013, Block (Square, Inc.) released Cash which allowed users to send electronic payments to email addresses. The Cash App mobile payment service soon became a downloadable app for Android and iOS users.
The app allowed users to accept direct deposits and traditional ACH payments. Square then acted as an alternative option for businesses to use as a point-of-sale system.
To stand out from rivals like Venmo (a PayPal subsidiary), Google Pay, and Apple Pay, Square offered a Cash Card in 2017. Mobile users who linked their Cash Card to their accounts could make ATM withdrawals.
In 2018, the company began allowing its users to buy and sell Bitcoin through the app. Cash App Investing—the buying and selling of stocks and ETFs—also became available in 2019.
Cash App experienced a 3,000% increase in annual revenue between 2018 and 2021. Approximately 75% came from Bitcoin transactions alone.
Along with the rising popularity of Bitcoin, some may use Cash App for online gambling.
Why is Cash App growing? Here’s a closer look.
The Bitcoin Lightning Network
At the beginning of 2022, Cash App added the Bitcoin Lightning Network. This feature introduced a wallet for Bitcoin via any BTC address or Lightning QR code.
PayPal only allows users to “keep” their nontransferable Bitcoin on the platform.
Free until 2019, Bitcoin purchases on Cash App require about a two percent fee. This comes aside from the spread between the Bitcoin buy and sell price offered by the Cash App exchange.
The Bitcoin Lightning Network allows users to send some or all their BTC to other accounts. They can transfer BTC between network addresses by scanning the appropriate QR code.
About half of Block’s Q1 2022 revenue came from Bitcoin.
Peer-to-Peer (P2P) Payments
Businesses may accept Cash App payments through the app with their $Cashtag. Users get the option to Request or Pay for goods and services.
Cash App users may appear in the search bar or from the contacts list on a user’s phone. The ability to scan a QR code comes as an extra feature.
From the $ tab at the bottom of the screen, users may click the square-shaped button at the top left corner. Options then include Scan a QR Code or My Code.
My Code generates a personal QR code attached to a user’s account.
A user may share their $Cashtag via:
- Sms
- A copied link
- A downloadable photo
- Any other apps on their phone (WhatsApp, Gmail, Facebook, etc.)
Cash App users may also send stocks and ETFs. The Send a Stock feature transfers cash for any 1,600 stocks or ETFs available for the sender’s choosing.
Beyond it, you can also have a look at a Cash Receipt Maker
Banking Services
Users may access their cash balance from the Banking (Balance) tab on the bottom left of the Cash App screen. The routing and account numbers to the Cash App account are separate from linking a bank or debit card.
Users may Add Cash to their balance or Cash Out. Standard deposits to a bank account come free of charge within 1-3 business days. Instant Deposits linked to a debit card cost 0.5% to 1.75% or at least $0.25.
The Direct Deposit feature allows users to get paid up to two days faster than a traditional bank. The automatic setup lists payroll providers and popular employers such as:
- Amazon
- Walmart
- DoorDash
- Lyft
- United Parcel Service (UPS)
- Walgreens
- Home Depot
- Chipotle
- Uber
- Target
A similar feature comes as bank transfers via Cash App routing and account numbers. Other banking services include:
- Paper money deposits (at deposit locations)
- Check deposits
- Recurring deposits
- Free tax filing
Cash Card
The Cash App Cash Card comes as an option for users to request a customizable Visa prepaid card. This card connects to a user’s Cash App balance.
ATM withdrawals with the Cash Card include a $2 fee for Cash App and any extra banking fees. (Users who receive more than $300 in direct deposits per month may receive discounts.)
Besides Lyft and DoorDash, the Boost feature offers discounts at various retailers like:
- Instacart
- Shake Shake
- Crocs
- Fandango
- Sam’s Club
- Mattress Firm
- Tillys
- Adidas
- Chick-fil-A
- Starbucks
Boost discounts may be redeemable at participating grocery stores, restaurants, or coffee shops. (Some discounts offer 10% worth of Bitcoin with at least $1.50 purchased and at most $7.50 earned in BTC.)
Key Takeaways
Most of the recent growth attributed to Block’s Cash App comes from Bitcoin purchases. While businesses shuttered during COVID-19 lockdowns, interest in cryptocurrencies surged to all-time highs.
Cash App’s Bitcoin revenue saw explosive growth from $510 million in 2019 to $10.02 billion in 2021. By then, the company’s annual revenue reached $12.3 billion with a profit of $2.07 billion.
Block’s Cash App began with a few million users in 2016. The company boasted more than 70 million active monthly users as of 2021.
Cash App’s gross profit climbed 26% year-on-year for Q1 2022. Bitcoin revenue declined.
Analysts predicted that Cash App’s frequent innovation makes sustainable growth possible. The company has excellent potential to expand in international markets.