Cash App’s Afterpay acquisition consolidates market position
In the Interview, the specialist commented on Cash App’s short and long term strategy, the teen banking market, CEO Jack Dorsey’s role at Block, and how Cash App compares to other neobanks in the industry.
The recent drop-off at Cash App was “expected”, the specialist said, given government stimulus stemming from the COVID-19 pandemic was ending. The specialist said that while the drop-off was similar to those experienced by e-commerce and software companies when they were converting customers over to digital platforms, customers were still engaging with the platform by either spending on the platform’s Cash Card, or with the other financial products on offer.
The drop-off will however have little effect on Cash App’s future ambitions, the specialist said, as it steps up efforts to make the platform the primary account for its consumers. The specialist said it needs to improve user’s experience and communicate better with its customers, as well as offer more “value” long-term by giving customers a comprehensive and holistic financial service.
Teen banking could be an area where Cash App can attain those primary account users, the specialist said. Cash App’s branding, low banking fees and approach to teen customers gives it a “leg up” on its rivals, and the specialist said it should focus on rolling out schemes that turns using Cash App into something habitual for the next generation.
Cash App’s recent acquisition of Afterpay, an Australian financial technology company, was a benefit for both companies, the specialist said, giving Cash App something most chartered banks don’t have and making it more attractive to newly acquired merchants. The acquisition also strengthens Cash App over its competitors in a market that the specialist foresees will see many neobanks “flushed out” over the coming years.
The specialist said Cash App would continue to be “far stronger than the rest,” due to the innovative and fast-moving nature of parent company Block, a feature which the specialist attributed closely to the company’s “very effective” CEO, Jack Dorsey.
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