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December 9, 2020Blog Posts

Square’s CFO Says Cash App Was Too Profitable in 2020

The Motley Fool

The Cash App has been a major bright spot for Square in 2020 as its Seller business faces various challenges from the COVID-19 pandemic. While gross profit growth on the Seller side of the business slowed to single digits through the first three quarters of 2020, Cash App gross profit has nearly tripled. In the third quarter, Cash App gross profit continued accelerating, improving 212% year over year.

While management expects that growth to moderate in the fourth quarter and into 2020, CFO Amrita Ahuja still admits the company could’ve done more to capitalize on the success of Cash App. “Frankly, that’s probably too fast in terms of margin progression,” she said at a recent investors conference.

Ahuja says there’s a $60 billion addressable market for Cash App in its existing products and markets. As of the end of the third quarter, Cash App was on a run rate of $1.74 billion, excluding bitcoin transactions.

There’s a lot of room for Square to keep growing Cash App. 

To its credit, Square’s user base and product adoption have improved considerably over the last few years. It now counts 30 million monthly active users, about 7.5 million of whom use the app daily. The percentage of monthly users transacting daily has steadily improved as Square expands the product ecosystem as well, reaching 23% at the end of the third quarter.

Square logo and symbol, meaning, history, PNG

Source

Looking for information about how COVID-19 has impacted the payments industry?

The Strawhecker Group (TSG) and Visa Consulting & Analytics (VCA) teamed up to survey a representative sample of U.S. consumers, and analyzed Visa’s proprietary spend data, with the goal of understanding how the COVID-19 pandemic has impacted consumer lifestyles, payments trends, and how behaviors may change after the pandemic.

Click here to download TSG and Visa’s infographic, Purchasing in a Pandemic.

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