When you hear the name Jack Dorsey, you probably think of Twitter. But you should really be thinking of Square. Square, whose $64 billion market cap is over double that of Twitter’s, has exploded over the last four years with revenue growing by an average of 41 percent year-over-year. A lot of this success can be attributed to the rise of Cash App, Square’s peer-to-peer payment service.
In Q1 of 2020, Cash App accounted for roughly 38 percent of Square’s revenue and nearly 40 percent of its gross profits. In its recent Q2 earnings call, the company announced that the app had brought in $1.2 billion in revenue and $281 million of gross profit, an increase of 361 percent and 167 percent year-over-year respectively. Cash App has also successfully stolen a handful of users from its main competitor, Venmo. As of June 2020, Cash App had surpassed Venmo in monthly active users (MAU’s) making it the dominant peer-to-peer payment mobile app.
Features: Unlike Venmo who’s stuck to its guns in peer-to-peer payments, Square has made an effort to consistently provide users with new features. Over the past few years, Cash App has given users the ability to invest in fractional shares of stocks and Bitcoin, earn discounts on their favorite brands (Boosts) and receive direct deposit and ACH payments. This last feature, which is now also offered by Venmo, has been an attractive selling point in the pandemic as many Americans without traditional bank accounts have sought out ways to receive their stimulus checks faster. During this time period searches for Cash App increased dramatically compared to Venmo’s, as we can see in the chart below.
Marketing Strategy: Marketing a service-based business on social media is traditionally a tough task but Square has made it look easy. With over 2.3 million followers on Twitter and Instagram combined, Cash App has tapped heavily into digital marketing to make itself the go-to payment platform for the younger generation. Customer acquisition has been a breeze through Cash App Friday, a weekly promotion where users drop their $Cashtags (usernames to receive payment) and the marketing team picks select people to receive free money. While this promotion is clever, the real genius has been shown in its influencer marketing campaigns. Over the last few years, the team has worked with top celebrities (Travis Scott and Megan Thee Stallion), gaming collectives (100 Thieves) and podcasts (Joe Rogan and Barstool’s Pardon My Take) in attempt to capture as many Zoomer eyeballs as possible. In February, Square’s marketing team collaborated with Shiggy to create a catchy song to be featured in TikTok videos, providing creators with ideas of how to use it in their content. The campaign resulted in over 9,400 videos totaling over 156 million views.
Bottom Line: The Cash App freight train is picking up speed and doesn’t seem to be stopping anytime soon. With the team’s knack for innovation and the ability to resonate with younger demographics, Cash App is quickly becoming the go-to bank account for Gen Z.