If you’ve ever been to a farmer’s market and been pleasantly surprised to find out that you can use your card to pay for those fresh veggies and handmade soap, you most likely have Block (SQ) to thank for saving you a trip to an ATM for cash.
Formerly known as Square, the company makes small business transacting easy – all you need is an iPad and a little square device and voila, you can get paid.
An estimated two million merchants use Square to process transactions.
Of course, today, the company better known as Square is “Block,” and its biggest cash cow is now Cash App – a “super app” that allows consumers to send, spend, and store money, all within the same ecosystem.
Cash App boasts 53 million monthly active accounts, according to Block’s most recent shareholder letter, and brought in $931 million in gross profits in the first quarter, representing a 49% year-over-year increase.
Block’s Cash App caters to a consumer trend gaining serious momentum: digital wallets. Our database is picking up a 13% year-over-year increase in consumers talking about digital wallets on social media.
Cash App also taps into the rising popularity of Bitcoin (BTC), allowing users to trade the cryptocurrency since as early as 2018.
Consumer mentions of trading crypto are surging 42% year-over-year.
With Cash App under its belt, Block should have a lot going for it… in theory.
But the company keeps finding itself in the crosshairs.
On March 23, SQ shares took a 15%-plus hit when short-seller Hindenburg Research accused Cash App of facilitating fraud and lacking compliance controls.
SQ’s stock price was just starting to recover when reports surfaced this week of Cash App users being double-charged for transactions; Block issued a statement saying it would refund those customers…
But not before it ticked off a whole lot of people.
This is more than just an image problem.
As you’ll find out, we’ve seen trouble brewing beneath the surface for Block for a while now.
And Landon recently went on air to share why SQ is a stock to avoid at all costs…
Watch now:
The competition in this space is fierce.
And when it comes to digital banking, this company simply does it better.
Until next time,
Andy Swan
Founder, LikeFolio