The number of the app’s users who have their paychecks directly deposited into their Cash App account rose by 25% year over year to reach 2.5 million in December, Bloomberg reported Thursday (April 3).
This is a key metric because those who have set up direct deposit are most likely to use the company’s other banking services, according to the report.
Cash App’s efforts are meant to expand its customer base from the underbanked people it has traditionally served to anyone earning up to $150,000 a year, the report said. It has 57 million active users.
“Our long-term goal is to be the primary provider of banking services to the vast majority of Americans,” Block Executive Officer and Business Lead Owen Jennings said, per the report. “In order to do that, you need to cross the chasm in terms of reputation and brand recognition from a simple peer-to-peer app to a full-fledged suite of banking services.”
The company’s most recent efforts to promote its banking services include a marketing campaign in 15 cities in January and approval from the Federal Deposit Insurance Corp. to issue short-term consumer loans through Block’s Square Financial Services, the report said.
At the same time, Cash App faces challenges in drawing customers to its banking services. These include customers’ uncertainty about using the app for all their everyday banking; competition from FinTech rivals like Chime Financial, Robinhood Markets and PayPal Holdings’ Venmo; and a settlement with the Consumer Financial Protection Bureau in which the regulator found that Block’s investigations into unauthorized transactions on Cash App were “woefully incomplete,” according to the report.
Square Financial Services’ receipt of approval from the FDIC to make consumer loans directly to borrowers, using Cash App Borrow, represented a shift, PYMNTS reported last month. Before making the move, Square Financial Services focused on offering Square sellers business loans and savings accounts, and Block made the consumer loans through its external banking partner.
