Square Still Crafting a Universal Bank

After having spent several months working on expanding their range of offers, Square shows even higher ambitions and claims they intend to make banking services available for their customer, from their Cash App. This strategy is further strengthened by their application for a banking licence filled last year.

At a conference held by Recode, Square’s CFO disclosed some figures as to the growth of Cash App over the past months. Nearly $200 million in balances are held by 7 million monthly active users.

Also, $260 million have been spent using the app. Or, three times more than in the end of December 2017.

Given this significant balance, Square intends to add ways for their customers to use their money. Two use cases are considered: savings and investments, as already proposed for their Bitcoin trading service.

Comments – More candidates aiming for the retail banking sector

Ever since they launched their mPOS device, Square’s history has been marked by several diversification-related announcements. First, they paid attention to merchants’ needs, then, they focused on BtoC offers when issuing a card for their P2P wallet and, in 2017, they introduced a consumer lending service. These additions to Cash App are hints as to what Square could look like in a few years: a universal banking app, encompassing various services.

More generally, Square’s strategy is reminiscent of other PSPs’ choices as they try to cover the entire value chain. To this respect, the first step was to include a card offer –several companies, such as Venmo and Lydia, already made announcements. Yet, other services can still be added, including consumer credit offers. Klarna, for instance, evolved from a PSP to a universal bank, using this strategy.