8 Things You Need to Know About Block (Formerly Known as Square)
Block (formerly known as Square), the company entrepreneur Jack Dorsey built to serve small businesses in need of better financial tools and resources, continues to expand. First there was Square which was founded in 2009. Then Block added Cash App in 2013. Then Tidal and After Pay were brought into the fold last year. Block is also focused on expanding the use of and access to Bitcoin. If you are curious about the growth and strategy of this growing conglomerate then consider these eight things Block is focusing on.
1. Dorsey sees Bitcoin as the prevailing cryptocurrency for online transactions. Cash App users can buy and sell Bitcoin using the app. “The world ultimately will have a single currency, the internet will have a single currency. I personally believe that it will be bitcoin,” says Dorsey.
2. Cash App started allowing users to make purchases in Bitcoin in 2018, making Cash App one the first mainstream payment apps to do so. Block has $156 million of Bitcoin on its books as of September. Part of Cash App’s growth is due to the fact that it’s easy to buy and sell Bitcoin using Cash App. In 2021 $10 billion worth of Bitcoin transactions flowed through Cash App and more than 10 million Cash App users have used the app to buy Bitcoin since 2018.
3. Block is planning to develop its own Bitcoin mining system. It is also creating a Bitcoin hardware wallet which will allow people to store Bitcoin in a secure device. As CNET writes: “Bitcoin wallets are used to store cryptocurrency and have a private key for security. Hardware wallets are considered among the most secure, since they store Bitcoin in a physical device that can be plugged into a computer or phone.”
4. Square purchased buy now pay later (BNPL) company After Pay for $29 billion last year. Following the acquisition merchants using Square are able to offer BNPL to their customers. This is a win for smaller merchants who many not have been able to afford the fees typically charged by BNPL companies. In the United States the number of BNPL users is expected to grow by 31.5% to reach 59 million this year. Offering BNPL is lucrative because it can increase conversion rates by 20% to 30% and average ticket sizes between 30% to 50%.
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5. In the third quarter Cash App had 49 million active users up from 45 million in the first quarter of this year. In the first quarter of this year the average Cash App active user put $1,000 into their Cash App account. On average a Cash App user makes 16 transactions per month and often uses Cash App to pay for groceries, utilities and gas. Cash App’s transaction volume is estimated to reach $116 billion this year up 35.6% from last year. Cash App plans to offer users more financial services over time so that it can become a one stop shop for banking needs. Cash App is now within the world’s top ten payment services.
6. Block purchased music streaming service Tidal for $300 million last year. Speaking about the acquisition Dorsey says “it comes down to one simple idea: finding new ways for artists to support their work.” “New ideas are found at intersections, and we believe there’s a compelling one between music and the economy. I knew TIDAL was something special as soon as I experienced it, and it will continue to be the best home for music, musicians, and culture.”
"Given what Square has been able to do for sellers of all sizes and individuals through Cash App, we believe we can now work for artists to see the same success for them, and us. We’re going to start small and focus on the most critical needs of artists and growing their fanbases," said Dorsey.
7. Block believes that between Square and Cash App the addressable market opportunity is $200 billion up from $60 billion in 2017.
8. Speaking about Block and its lines of business Dorsey has said that: “Square [is] for sellers, Cash App for consumers, TIDAL for musicians, and TBD [the subsidiary of Block focused on Bitcoin is] for developers. What makes Block unique is our ability to connect all of these together.”