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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.

This includes pending credit, debit, and cash transactions across Square sellers, the Cash App Card, and Afterpay from the day before Thanksgiving (November 27) through Cyber Monday (December 2). The number of transactions grew 17% YoY. Online sales value surged 21% YoY, compared with 17% for in-store shopping. The average online cart size was also twice as large as in stores.

And 30.9% of users will use Cash App. Our take: For X Money to take off, it will have to differentiate itself from the major P2P players.

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.

But regardless of what happens with this lawsuit, Zelle鈥檚 continual fraud concerns may lead to longer-term reputational issues鈥攑ushing users to competitors like Cash App or Venmo. We expect the number of Zelle users to total 96.6 million in 2025, per our forecasts.

Many digital-first banks and financial apps have minimal identification requirements, making it easier for people without traditional documents to open accounts. And alternative banking services like PayPal, Cash App, and Venmo have allowed customers who may not have qualified for bank accounts鈥攐r who have felt intimidated by account-opening processes鈥攖o use basic banking services.

The update should help consumers feel safer using the P2P app, which may help boost Apple Cash adoption

US P2P apps need to tap new uses and services to stay competitive, especially amid Zelle鈥檚 dominance. Here鈥檚 how each app sizes up and differentiates to attract younger generations.

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.

NFC access unlocks consumers鈥� most popular in-store mobile payment methods for US wallets and payment apps. Payment apps like 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 the Federal Reserve Bank of Atlanta.

Surging Cash App user growth helped drive a buoyant Q1 for Block despite recent short seller allegations.

The app鈥檚 expanding product suite could appeal to this group. But they won鈥檛 be an easy sell, and Block risks becoming over-reliant on Cash App.

In-store transactions involving Block鈥檚 payment brands鈥擲quare, Afterpay, and Cash App鈥攊ncreased 17% YoY during the Black Friday/Cyber Monday weekend, although the company noted that online cart sizes were twice as large as those in physical stores. Our take: The Cyber Five鈥檚 success is good news for retailers as they enter the home stretch.

Payment networks like Zelle, Venmo, and Cash App provide real-time payment options to consumers鈥攂ut they do not settle the funds. For example, Zelle typically credits transactions instantly to payees. But the actual settlement of funds occurs instantly only via the RTP network (if the sender鈥檚 and recipient鈥檚 banks both use it). Otherwise, transactions are settled later via ACH.

PayPal's outage highlights rising API-related flaws in finance. With 80% of U.S. adults relying on app-based payments, regulatory scrutiny and customer frustration could reshape the competitive landscape.

For Block, P2P payments have served as a gateway to its Cash App Card, which now counts 23 million monthly Cash App Card users. The debit card boosts user retention while delivering Block a cut of swipe fee revenues. Block continues to introduce other options鈥攊ncluding a high-yield savings account and investing tools鈥攖o entice cardholders to use Cash App as their primary bank.

It wants to develop more adjacent services for the Cash App ecosystem, which could help it maintain its Q4 growth trajectory.