How Square’s Cash App is Evolving to Stay Competitive in the Peer-to-Peer Payment Market
Just a couple of weeks ago I took two friends out to my favorite local pizza place. We decided it would be best to share a large ‘House Special” which was more than capable of feeding the three of us. To keep things simple, I offered to pay for the entire pizza if they would send me a few dollars on the Cash App. Instead of a traditional “IOU” or “I’ll get the next one,” we were able to settle the payment right then and there.
These days, there are many apps that people use to send money back and forth to their friends. With no transaction fees and speedy processing time, the entire peer-to-peer transaction process has been simplified. Founded in 2009, and now boasting over 40 million users, Venmo Is one of the giants in this space. Zelle, which released in 2017, has also made great strides by partnering with some of the largest financial institutions to make moving money, between a user’s bank account and Zelle, almost seamless. Zelle has recently reported over 27.4 million active app users. For Square’s Cash App to grasp a share of this growing market, they knew they had to do something different. In this blog, I highlight three key features of the Cash App that differentiate it from the competition and could lead to its long-tail success.
Buy and Sell Cryptocurrency
While the number of people who have a stake in the “crypto market” is unknown, a large percentage of the population has at least heard of Bitcoin. When questioned, many people have expressed that the reason they haven’t bought cryptocurrency is because it seems too difficult or complicated to purchase. Square understood this frustration and looked to solve this problem by adding Bitcoin purchasing as a feature of their Cash App. Now, users can buy and sell Bitcoin in-app with just a couple of clicks. Square recently announced that users purchased a whopping $148 million in bitcoin during Q3 of 2019. I guess you could say people like the simplicity of the Cash App.
Zero-Fee Trading of Stocks
Modeled after the Robinhood app, which was introduced in 2013, Cash App users can now trade stocks on the market with zero fees. This creates a lot of utility for app users who are looking for reasons to keep their money inside of the Cash App ecosystem as opposed to withdrawing it to their bank account as soon as they receive money from a friend. Seeing that Robinhood was recently evaluated at $7.6 billion, it is more than likely that users will take full advantage of this highly sought after feature.
Direct Deposit
Square realized that if they could get users to put more money into the Cash App, that they would be more likely to engage key features of the platform. What is the best way to achieve this? Allow users to deposit their paycheck directly to the app. Unlike Venmo and Zelle, Cash App allows users to direct deposit their paycheck right into their mobile wallet. This gives app users the flexibility to pay off any debts owed to friends, invest in stocks or crypto, then transfer any remaining balances to their checking or savings account instantly.
It is clear that these kind of features and flexibility are very desirable to consumers. This is why Cash App’s user base doubled in 2018 and now serves over 15 million unique users. Cash App continues to rise above the competition in terms of features and accessibility. It will be interesting to follow the growth of the Cash App and see how competitors, like Venmo and Zelle, are forced to adapt and offer features to match up.
