Block, Inc. and its subsidiaries (‘Block’) create tools that empower businesses, sellers, and individuals to participate in the economy.
Block is building an ecosystem dedicated to economic empowerment and unlocking access to the financial system for people around the world. The company does this by building the most relevant products and tools for the communities it serves, including sellers, consumers, artists, fans, and developers. The company's brands work together cohesively, often positiv...
Block, Inc. and its subsidiaries (‘Block’) create tools that empower businesses, sellers, and individuals to participate in the economy.
Block is building an ecosystem dedicated to economic empowerment and unlocking access to the financial system for people around the world. The company does this by building the most relevant products and tools for the communities it serves, including sellers, consumers, artists, fans, and developers. The company's brands work together cohesively, often positively reinforcing one another and creating resonant relationships with people who use its products to meet multiple needs across the different aspects of their lives. As the company scales, it is focused on investing in building deeper connections between its ecosystems and increasing the resilience of the company.
Segments
The company's two reportable segments are Square and Cash App.
Square Ecosystem
The company started Block with the Square ecosystem to enable businesses (‘sellers’) to accept card payments, an important capability that was previously inaccessible to many businesses. As the company grew, it recognized that sellers need a variety of solutions to thrive and saw how it could apply its strength in technology and innovation to help sellers. The company has since expanded Square into a cohesive commerce ecosystem that provides more than 30 distinct products and services to help its sellers start, run, and grow their businesses. It combines software, hardware, and financial services to create products and services that are cohesive, fast, self-serve, and elegant. These attributes differentiate Square in a fragmented industry that traditionally forced sellers to stitch together products and services from multiple vendors, and often rely on inefficient, non-digital processes and tools. The company's ability to add new sellers efficiently, help them grow their business, and cross-sell its products and services has historically contributed to its long-term growth.
Cash App Ecosystem
Cash App provides an ecosystem of financial products and services to help consumers manage their money. Cash App’s intention is to redefine the world’s relationship with money by making it more relatable, instantly available, and universally accessible. While Cash App started with the single ability to send and receive money, it now provides an ecosystem of financial services focused on helping consumers make their money go further by enabling customers to store, send, receive, spend, invest, BNPL (buy now, pay later), borrow, or save their money with Cash App. Over time, with its bank partners, Cash App is aiming to become one of the top providers of banking services to households in the United States.
TIDAL Ecosystem
TIDAL expands the company’s purpose of economic empowerment to artists. TIDAL is a global platform for musicians and their fans that uses unique content, experiences, and features to bring fans closer to artists and to provide artists with tools to succeed as entrepreneurs. TIDAL offers an extensive catalog of more than 162 million songs and 927,000 high-quality videos. TIDAL has a global presence with listeners in more than 60 countries and relationships with more than 300 labels and distributors.
Bitcoin Ecosystem
The company's bitcoin ecosystem includes its bitcoin hardware projects, which include Bitkey, a self-custody bitcoin wallet, Proto, a bitcoin mining system, as well as Spiral, an independent team focused on contributing to bitcoin open-source work. In the fourth quarter of 2024, the company announced its decision to wind down TBD, which was an open developer platform for decentralized finance.
Customers
Square Sellers
Square sellers represent a diverse range of industries (including services, food-related, and retail businesses) and sizes, ranging from sole proprietors to multinational businesses. Square sellers span geographies, including the United States, Canada, Japan, Australia, the United Kingdom, Ireland, France, and Spain. The company has also increasingly served mid-market sellers.
In the year ended December 31, 2024, more than 4 million sellers used the Square ecosystem to make 5.2 billion individual sales transactions. These sales transactions originated from more than 800 million payment cards, across more than 300 million buyer profiles.
Cash App Customers
As of December 2024, Cash App had 57 million monthly transacting actives across the United States. In 2024, Cash App was the number one finance app on Google Play and the number two finance app on iOS based on downloads in the United States. Cash App has a diverse mix of customers, and in the United States, it had monthly transacting actives in several states and nearly every county as of December 2024.
In 2024, Cash App transacting actives brought in inflows into Cash App. A transacting active is a Cash App account that has at least one financial transaction using any product or service within Cash App during the specified period. Examples of transactions include sending or receiving a peer-to-peer payment, transferring money into or out of Cash App, making a purchase using Cash App Card, earning a dividend on a stock investment, and paying back a loan, among others.
Products and Services
Square Ecosystem
The Square ecosystem consists of more than 30 distinct software, hardware, and financial services products. The company’s products are designed to be self-serve and intuitive to make initial setup and new employee training fast and easy, although it also offers full-service setup and support. The company's products are also flexible enough to serve the needs of both small, single-location and large, complex multi-location sellers. Its products are integrated to create a seamless experience and enable a holistic view of sales, customers, employees, and finances. The company supplements these first-party capabilities with its open developer platform that enables integrations with third-party applications. It monetizes these products through a combination of transaction, subscription, and service fees.
Strategic Priorities
The company’s focus for Square is on four priorities: maintaining its secure and flexible multi-product platform, providing a ‘local’ experience to sellers of all sizes, growing with artificial intelligence (‘AI’), and further developing its banking offering.
Platform: Platform is critical that the company has a strong foundation to build upon to serve external customers through its developer platform and partner ecosystem, and its internal team's first-party products. This includes increasing the reliability of its platform and also introducing products and features that are most important to its customers.
Local: The company’s go-to-market strategy is focused on verticals with a local approach, specifically restaurants and services-based businesses. Growing upmarket has shown that even larger sellers want to feel authentic to their buyers.
Artificial Intelligence (AI): The company is focused on enabling growth by leveraging AI to increase productivity and outcomes for its sales and marketing, customer service, and engineering efforts, in addition to building features that help sellers grow their businesses.
Banking: The company’s robust banking offering primarily helps its sellers manage cash flow and grow their business through its lending capabilities.
Commerce
Square's commerce products help sellers make sales and track orders, inventory, and fulfillment across in-person and online channels, as well as first-party and third-party channels. Most of the company's Square commerce products have a free tier (without a subscription fee), which it monetizes only through transaction fees on card payments. Some commerce products also have premium tiers with additional functionality, which it monetizes through subscription fees in addition to transaction fees on payments.
Square Point of Sale is the company's primary commerce application for sellers, and provides an easy-to-use, customizable point-of-sale solution that adapts across business types and stages. Over the past year, the company has modernized and simplified its Point of Sale applications, combining its vertical software solutions into one Square Point of Sale app, which now includes:
A vertical solution tailored for both quick-service and full-service restaurants. It includes table, order, and course management; a kitchen display system; and revenue and cost reporting.
A vertical solution tailored for appointment-based businesses that need a point-of-sale application with integrated booking capabilities. Its features include a free online booking site. It is also integrated with Square Assistant, an AI-enabled automated messaging tool designed to respond to buyers efficiently and professionally, saving sellers' time and helping prevent missed appointments.
A vertical solution tailored for sellers in the retail industry. It includes advanced inventory management, cost of goods sold reporting, purchase orders, vendor management, and barcode scanning.
A customizable digital invoicing solution with integrated and secure online payment acceptance. This eliminates the need to print and mail statements to customers and wait for checks to arrive. Sellers use Square Invoices for upcoming, recurring, or previously delivered goods and services, such as catering orders, contractor services, lessons, and retail orders. Square Invoices also lets sellers send estimates and collect partial payments for goods and services.
Commerce products also include:
Square Online makes it easy to build a website and online store, as well as sell on Instagram and Facebook. The online store is mobile responsive, delivering an app-like ordering experience on a buyer’s phone. With integrated support for QR code ordering, sellers can also streamline their in-store operations by posting the QR code and having their buyers order from their own phones. Fulfillment options include pickup, delivery managed by its sellers, and integrations with partner delivery platforms. The system is designed for orders, items, inventory, and customer data to stay in sync when selling both online and in-person.
Square Online Checkout makes it easy to sell online without a website by allowing sellers to create a checkout link with only a name and price for their good or service.
Square Virtual Terminal allows sellers to use a computer as a card terminal. Sellers can take a payment, set up recurring billing, record sales, and send digital receipts for payments, including those made by check and bank transfer.
Risk Manager gives sellers insight into online payment fraud patterns and enables them to set custom rules and alerts to manage risk. Machine-learning algorithms are designed to automatically identify fraud patterns and adapt to fit a seller's operations.
Order Manager allows sellers to manage online orders that originate from Square Online, their own website on another platform, and third-party websites, including online marketplaces, such as DoorDash. Order Manager enables tracking open orders, managing prep times and busy times, and marking orders as completed.
Payment APIs (application programming interfaces) and SDKs (software development kits) support in-person, online, and mobile payments. Square Reader SDK enables developers to seamlessly integrate Square hardware with a seller’s custom point of sale, allowing them to build unique checkout experiences, such as self-ordering kiosks powered by Square’s managed payments service. Square's In-App Payments SDK enables developers to build consumer mobile apps that use Square to process payments. These products are monetized primarily through transaction fees on payment volumes.
Commerce APIs: Square offers more than 30 commerce APIs, through which developers can create and manage orders, subscriptions, product catalogs, inventory, customer profiles, employees, loyalty programs, gift cards, and more to build applications that enrich and integrate with Square's ecosystem of products. In addition, these APIs enable developers to build integrations with their existing business systems, such as accounting, customer relationship management (‘CRM’), employee management, and enterprise resource planning (‘ERP’) software.
For card payments, Square acts as the merchant of record for the transaction, as well as the payment service provider (‘PSP’). As the merchant of record, Square is the party responsible for settling funds with the seller and helps manage transaction risk loss on behalf of the seller. Square’s managed payments offering for sellers includes payment dispute management, data security, and PCI compliance for a transparent transaction fee paid by sellers. Square has negotiated terms and entered into contractual arrangements directly with other service providers of transaction processing services, including the acquiring processors and card networks, and indirectly with issuing banks. These contracts include negotiated terms, such as more favorable pricing, that are generally not available to sellers if they were to contract directly with these sub-service providers. Square's position as the merchant of record helps the company better serve its sellers. For example, as the merchant of record, the company can more efficiently onboard new sellers through its website, leveraging the company’s risk assessment models, and the company has insights into transaction-level data that the company uses to inform its sellers and launch new products.
Software
Most of the company's Square software products have a free tier (without a subscription fee), which it monetizes only through transaction fees on card payments. Most software products also have premium tiers with additional functionality, which it monetizes through subscription fees in addition to transaction fees on payments.
Square’s Customer capabilities help sellers grow their business. By linking customer data together with online and in-person commerce data, Square can offer sellers integrated omnichannel capabilities to acquire, engage, and retain customers. Square transaction data and reporting allows sellers to easily assess performance and return on investment. The company typically monetizes these products via service and software fees.
BNPL helps drive net new demand to sellers via discovery in the Afterpay app and has historically increased average conversion rates and average transaction sizes for new and existing customers across online and in-store channels.
Square Loyalty helps sellers keep their buyers coming back. The company has found that buyers that enroll in a Square Loyalty program have been more than three times as likely to be repeat customers and spend 50% more on average.
Square Marketing helps sellers drive traffic by sending emails or texts to promote in-store events, new products, last-minute deals, or seasonal offers. Sellers can set up recurring automated campaigns to welcome new customers, wish them a happy birthday, send abandoned-cart reminders, or reach out to lapsed customers.
Square Gift Cards help sellers bring in new buyers when their customers purchase gift cards for their friends and family.
Square's staff management products give sellers digital tools to streamline their operations. These tools are designed to seamlessly integrate with other Square products, eliminating the latent, time-consuming, and error-prone processes typically used to copy and sync data between disparate systems. The company typically monetizes these products via software fees.
Square Team Management makes it easy to schedule staff and view team performance and sales analytics in real-time. It also enables limiting access to Square software features per employee or role. The Square Team App enables team members to clock in and out, view and adjust their schedules, and see timecards, hours worked, and estimated pay from their mobile phone.
Square Payroll allows sellers to pay wages and associated employee taxes, and offer employee benefits (e.g., 401(k) accounts). The Square ecosystem drives competitive differentiation for the company’s Payroll product with the ability to use Payroll in conjunction with its point-of-sale products, Team Management, and Cash App.
Financial Services
Through company’s wholly-owned subsidiary bank, Square Financial Services, Inc. (‘Square Financial Services’), and with its third-party bank partners, the company offers a growing number of banking services that make it easier for sellers to manage cash flow and get faster access to funds.
Square Lending provides a platform of lending products to qualified Square sellers. Square Loans (formerly Square Capital) facilitates loans to qualified Square sellers through Square Financial Services, which is an industrial loan company (‘ILC’). Square Loans eliminates the lengthy (and often unsuccessful) loan application process. The company is able to approve sellers for these loans by using its unique data set of the seller’s Square transactions to help facilitate loan underwriting and collections, which mitigates risks. Generally, loan repayment occurs automatically through a fixed percentage of every card transaction a seller takes. The company funds a majority of these loans from arrangements with institutional third-party investors who purchase these loans on a forward-flow basis, which mitigates its balance sheet and liquidity risk. Since its public launch in May 2014, Square Loans has facilitated more than 3.1 million loans and advances. The company launched Square Credit Card in 2023 to provide another lending option to qualified Square sellers.
Instant Transfer enables sellers to receive funds from their payments instantly or later that same day. Instant Transfer is an important tool for sellers that need faster access to their funds in order to better manage their cash flow or working capital.
Square Checking provides sellers with an account provided by its bank partner that is eligible for FDIC deposit insurance if certain conditions are met. Square Checking gives sellers instant access to their sales and the ability to immediately use those funds via a debit card (Square Debit Card), withdraw funds from an ATM, or transfer funds via ACH.
Square Savings is an FDIC-insured, interest-earning business savings account at Square Financial Services, with no monthly fees or minimums, designed to make cash flow management easier for sellers. With Square Savings, sellers can easily and automatically put aside a portion of their sales in their savings account while also organizing their money within folders, streamlining the process of saving funds for specific goals and priorities, such as quarterly tax obligations.
Hardware
Square custom-designs hardware that can process all major card payment forms, including magnetic stripe, EMV chip, and NFC (contactless). Sellers are able to accept cards issued by Visa, Mastercard, American Express, Discover, JCB (in Japan), Interac Flash (in Canada), e-Money (in Japan), and eftpos (in Australia). Square hardware can be integrated with additional accessories, such as cash drawers, receipt printers, scales, and barcode scanners to provide sellers with a comprehensive point-of-sale solution. Square's hardware portfolio includes the following:
Square Register is an all-in-one offering that combines its hardware, point-of-sale software, and payments technology. The dedicated hardware consists of two screens: a seller display and a customer display with a built-in card reader that accepts tap, dip, and swipe payments.
Square Terminal is a portable, all-in-one payments device and receipt printer to replace traditional keypad terminals. It accepts tap, dip, and swipe payments, enabling payments anywhere in the store.
Square Stand enables an iPad to be used as a payment terminal or full point-of-sale solution. It features an integrated contactless and chip reader.
Square Reader for contactless and chip accepts EMV chip cards and NFC payments, enabling acceptance via Apple Pay, Google Pay, and other mobile wallets.
Square Reader for magstripe enables swiped transactions of magnetic-stripe cards by connecting with an iOS or Android smartphone or tablet via the headphone jack or Lightning connector.
Cash App Ecosystem
With Cash App, the company is building an ecosystem of financial products and services that helps consumers manage their money by making it more relatable, instantly available, and universally accessible. Cash App is primarily in the United States and has a diverse set of customers across demographics and regions. The company uses its inflows framework to assess the performance of Cash App across transacting actives, inflows per active, and the monetization rate on inflows.
Strategic Priorities
Cash App sits at the intersection of three traditionally-distinct use cases: financial services, community based transactions (peer-to-peer payments) and commerce. The company’s approach for Cash App is to combine these three areas together in a unique manner to define a new product category and reinvent banking for its customers.
The company has a three-part strategy: bank its base, move upmarket by serving families, and build the next-generation social bank. The majority of the company’s near term focus and current investments are on Banking its Base, the first part of the company’s strategy, where it sees the most direct opportunity to drive meaningful top line growth for Cash App. As part of the company’s strategy, it plans to continue to build trust with the company’s customers and enhance its safety, security, and support for current and prospective customers.
Bank the company’s Base: Cash App Card is generally customers’ entry point into a deeper banking relationship with Cash App. Beyond Cash App Card, the company wants to provide other banking services to its customers through the company’s third-party bank partners. Cash App offers a compelling financial services offering to eligible customers that utilize direct deposit on a monthly basis, including an attractive savings rate, free in-network ATM withdrawals, free overdraft coverage up to a certain amount, and priority phone support. The company plans to continue launching additional products and features to strengthen the company’s value proposition and also to invest in incentives and marketing to drive awareness and adoption of direct deposit.
Move Upmarket by Serving Families: Over the last few years, the company made Cash App available to individuals aged 13 and older, first starting with Cash App Card and peer to peer transfers and then expanding into additional banking features. The company has been focused on building trust and safety for teens and their parents by giving parents transparency into their family’s activity, allowing them to set permissions, and offering a robust set of oversight and controls. Through this effort, the company is positioning Cash App for long-term growth by serving families in the near-term and then growing with the company’s teen customer base as they mature, their income grows, and they engage more deeply with the full suite of banking products and financial services that Cash App offers through the company’s third-party bank partners.
Build the Next-Generation Social Bank: The company is continuing to invest in building its social-driven feature set through areas like expanded profile functionality, sharing/recommendations, and exploring new ways for the company’s customer base to transact together through financial services that have historically been disconnected from the community. The company wants to enable more local commerce by connecting the company’s two largest ecosystems, with Cash App customers buying from Square sellers.
Inflows and Outflows
Customers can use Cash App to inflow funds in a variety of ways, including by receiving money from another Cash App customer through the app’s core peer-to-peer transfer service, transferring money from a bank account, depositing mobile checks, adding physical cash at participating retailers, receiving a recurring paycheck by direct deposit, and through other inflow channels. These funds can then be sent to another customer through the app, spent anywhere that accepts Visa cards or Cash App Pay, withdrawn from an ATM using the Cash App Card, invested in stocks or exchange-traded funds (‘ETFs’), used to buy bitcoin, or transferred to a bank account (either instantly for a fee or for free in one to three days).
Trust
The company serves its customers through a broad suite of financial services, and earning their trust is a key factor. The breadth of the company's financial service offerings allows it to increase its share of wallet, as well as expand its customer base to serve a wider variety of demographics. The company develops trust with customers by offering reliable, easy, and secure access to their accounts and convenient support. It also adapts the amount of funds a customer can bring in through specific channels based on risk profile, and as it improves its understanding of a customer’s identity.
Product Categories
Banking Services
Through third-party bank partners, the company offers a growing number of banking services that are designed to make it easier for customers to manage cash flow and provide them with fast access to funds.
The Cash App Card is a debit card, issued by the company's bank partner, and linked directly to a customer’s Cash App balance. Customers can order a Cash App Card for free and use it anywhere that accepts Visa cards to make purchases, drawing down from the funds stored in their Cash App balance. Cash App earns interchange fees when individuals make purchases with their Cash App Card.
Direct deposit capabilities, in alliance with the company's bank partner and system processor, allow customers to receive their recurring paycheck, tax refund, or government disbursement into their Cash App account.
Savings allows customers to hold a separate savings balance at the company's bank partner, and easily set and track towards financial goals. Customers can add money to Savings using their Cash App balance, a linked debit card, or through Round Ups on purchases with the Cash App Card.
Cash Offers (formerly Boost) is a free and instant rewards program that offers customers discounts at specific businesses (e.g., 10% off a purchase on DoorDash) or at certain business types (e.g., grocery stores). Customers can select the Cash Offers they want to apply to their Cash App Card, and the discount is instantly applied to their Cash App balance for eligible transactions. Some Cash Offers are selected and funded by Cash App, while others are funded by the company's partners. Costs related to the Cash App rewards program that are funded by Cash App are recognized as reductions to revenue.
Cash App Borrow: Cash App Borrow, the company's first credit product for consumers, allows customers to access short-term loans for a small fee. The product offers eligible Cash App customers up to $1,000 at any one time that they can pay back in scheduled installments or as a percentage of what they receive into Cash App. The company determines a Cash App customer’s eligibility based on prudent risk management by using its unique data set that includes a customer’s inflows and engagement on Cash App. The average Cash App Borrow loan was repaid in less than four weeks in 2024.
BNPL Platform
Cash App is focused on driving greater commerce between consumers and merchants. The company's BNPL platform facilitates commerce between retail merchants and consumers by allowing its retail merchant clients to offer their customers the ability to buy goods and services on a BNPL basis. The BNPL platform provides consumers the ability to get desired items now but pay for them later, while simultaneously helping merchants increase sales and order values. The company has a range of products across its BNPL platform.
Pay in 4: Through the use of the company's BNPL platform, consumers can split their purchases into generally three or four installments, typically due in two-week increments, without paying fees (if payments are made on time). The company pays retail merchants the full order value up front (less a percentage fee) and assumes the risk of non-payment from the consumer.
Monthly Payment Solution: The company also offers the ability for consumers to pay for larger transaction sizes over a six- or twelve-month period using a monthly payment option. The structure of the product includes no late fees and no compounding interest with a cap on total interest owed. Similar to Pay in 4, the company pays retail merchants the full order value up front (less a percentage fee) and assumes the risk of non-payment from the consumer.
Advertising and affiliate: The company’s BNPL platform generates hundreds of millions of leads each year for merchants and has channeled this demand towards scaling an ads and affiliate program for its merchants: for affiliate relationships, the company receives a commission when a consumer begins their shopping journey in the Afterpay App and makes a purchase. The company may also receive digital advertising revenue based on clicks to a merchant site from the Afterpay App, as well as flat fees for premium ad placements.
Shop directory: The company operates an online shop directory, which allows consumers to search by product category for stores that offer Afterpay as a payment option.
Afterpay Card, Afterpay Plus Card: The company offers two in-store cards that allow consumers to pay in 4 for in-person transactions at a merchant’s point of sale. The Afterpay Card allows consumers to shop in-store at Afterpay merchants and is free for the consumer. The Afterpay Plus Card is available to select Afterpay consumers in certain regions for a monthly fee and allows them to shop in-store anywhere that Apple Pay or Google Pay is accepted.
Community
Peer-to-peer payments form the basis of the company's Community development pillar because customers engage in financial transactions with other members of the Cash App community. When customers use peer-to-peer, they are inviting their friends, family, and coworkers to download Cash App so that they can send each other money. Peer-to-peer becomes more useful for customers as their communities expand, so they are naturally incentivized to bring more people into their networks. The company offers the peer-to-peer service to its Cash App customers for free when a linked debit account is used to fund a transaction, as it considers peer-to-peer to be a marketing tool to encourage Cash App usage. The company charges a fee to the sender when transactions are funded using a credit card, and a fee to the recipient if it is a business account.
Instant Deposit was the first feature the company started monetizing on Cash App. Customers are able to instantly transfer funds from Cash App to a bank account for a small fee.
Cash App Pay
Cash App Pay is a simple, mobile-friendly way for Cash App customers to pay at merchants across online and in-person channels. Cash App Pay allows customers to seamlessly pay with a Cash App account at participating merchants like DoorDash, Lyft, Google Play Store, Temu, and many more, including thousands of Square sellers. For in-person and desktop web transactions, customers simply scan a merchant’s QR code at checkout. On mobile devices, customers can click the Cash App Pay button at checkout for a payment process that is fast, elegantly designed, and secure.
Bitcoin
The company has a simple bitcoin exchange and custody solution that provides customers with an onramp and offramp to buy and sell bitcoin with Cash App for as little as $1 and a custodial account to store it securely without needing to keep track of any private keys. The solution offers features that allow customers to complete auto buys and custom limit orders, as well as direct deposit to auto-convert their paycheck into bitcoin and earn instant bitcoin rewards on Cash App Card purchases.
The company has also focused on payments through bitcoin. It has since added the ability for customers to send bitcoin across the Cash App network to any phone number or $Cashtag, creating an easy-to-use off-chain network for bitcoin payments that settles instantly between transacting actives. The company also allows the U.S. actives to send and receive bitcoin to/from anyone with a compatible wallet via the Lightning Network. The Lightning Network is a second layer technology applied to the bitcoin blockchain that enables faster transactions with little to no fees.
Tax Preparation
Cash App Taxes provides a seamless, mobile-first solution for consumers to file their taxes for free.
Stock Brokerage
Customers can also use Cash App to invest their funds for free in the U.S.-listed stocks and ETFs. This makes investing more accessible by giving customers access to hundreds of listed stocks and ETFs that they can purchase using their Cash App balance or a linked debit card for as little as $1. Once the order is filled, all investments are viewable through the stocks applet.
Business Accounts
Cash App allows business accounts to collect payments for their business by accepting peer-to-peer transactions for a fee, while allowing higher weekly limits and providing relevant tax reporting forms.
Sales and Marketing
Square Ecosystem
The Square ecosystem has a strong brand affinity among its sellers. The company's Net Promoter Score (‘NPS’) has averaged 53 over the past four quarters, which is notably higher than the average score for banking providers. The company’s high NPS means Square sellers recommend the company’s services to others, which strengthens the Square brand and helps drive efficient customer acquisition.
Direct marketing, online and offline, has also been an effective customer acquisition channel. These tactics include online search engine optimization and marketing, online display advertising, direct mail campaigns, direct response television advertising, mobile advertising, and affiliate and seller referral programs.
The company's direct sales and account management teams also contribute to the acquisition and support of larger sellers. Historically, the sales team was primarily focused on converting inbound leads from interest generated through other acquisition channels, and in more recent years, it has built out an outbound sales team focused on outreach to new prospective sellers. These outbound sales were traditionally done remotely via telephone. In the fourth quarter of 2024, the company began hiring a field sales team to focus exclusively on in-person seller outreach to further increase the acquisition of larger sellers.
The company's direct, ongoing interactions with its sellers help it tailor offerings to them, at scale, and in the context of their usage. It uses various scalable communication channels, such as email marketing, in-product notifications and messaging, and Square Communities, the company's online forum for sellers, to increase the awareness and usage of its products and services with little incremental sales and marketing expense. The customer support team also helps increase awareness and usage of the company's products as part of helping sellers address inquiries and issues.
In addition to direct channels, the company works with third-party developers and other partners who offer its solutions to their customers. Partners expand the company's addressable market to sellers with individualized or industry-specific needs. Through the Square App Marketplace, Square partners are able to expand their own addressable market by reaching the millions of sellers using Square. As of December 31, 2024, Square had more than 900 managed partners connected to its platform.
Cash App Ecosystem
Cash App has also developed a strong brand, which can be traced back to the company's compelling features, self-serve experience, unique design, and engaging marketing.
Peer-to-peer transactions serve as the primary acquisition channel for Cash App. Peer-to-peer transactions have powerful network effects, as every time a customer sends or requests money, Cash App can potentially acquire a new customer or re-engage an existing customer. The company has enhanced the efficiency of peer-to-peer transfers by streamlining the onboarding process for Cash App, enabling customers to sign up in minutes. The company offers the peer-to-peer service to its Cash App customers for free, and it considers it to be a marketing tool to encourage the usage of Cash App. The company does not generate revenue on the majority of peer-to-peer transactions, and for these transactions, it characterizes card issuance costs, peer-to-peer costs, and risk loss as a sales and marketing expense.
Cash App also uses paid marketing, including referrals, advertising spend, partnerships, and social media campaigns, to expand its network, as these programs help reach new customers, enhance its brand, and improve retention among existing customers. Cash App has a dedicated sales team focused on products like BNPL, Monthly Payment Solution, Cash App Pay, and other new and emerging products. This team builds relationships with several well-known merchants in the U.S. and relevant international markets for BNPL.
Additionally, the company sees the launch and advertising of new Cash App features as an important way to attract new customers and engage existing customers. Features, such as Cash App Card and Offers rewards, bitcoin buying and selling, investing in stocks and ETFs, Cash App Pay, and a tax preparation service enhance Cash App’s utility for customers and provide reasons for consumers to try Cash App.
Product Development and Technology
The company designs both its Square and Cash App products and services to be cohesive, fast, self-serve, and elegant, and product development is a cross-functional effort combining individuals from product management, engineering, data science, analytics, design, and product marketing. The company's products and services are platform-agnostic, with most supporting iOS, Android, and web. The company frequently updates its software products and has a rapid software release schedule with improvements deployed regularly. Its services are built on a scalable technology platform, and it places a strong emphasis on data analytics and machine learning to maximize the efficacy, efficiency, and scalability of its services.
In the company’s Square ecosystem, this technology platform enables it to capture and analyze billions of transactions per year and automate risk assessment for more than 99.95% of all transactions. The company’s hardware is designed and developed in-house, and it contracts with third-party manufacturers for production.
Intellectual Property
The company participates in a number of industry organizations that facilitate patent pools or non-assertion commitments, such as the Cryptocurrency Open Patent Alliance that it co-founded, LOT Network, and Open Invention Network.
The company uses various trademarks and trade names in its business, including ‘Block,’ ‘Square,’ ‘Cash App’ and ‘Afterpay,’ which it has registered in the United States and in various other countries.
Government Regulation
The company is registered as a ‘Money Services Business’ with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (‘FinCEN’). These licenses and registrations subject the company, among other things, to record-keeping requirements, reporting requirements, bonding requirements, limitations on the investment of customer funds, and examination by state and federal regulatory agencies.
Outside the United States, the company provides localized versions of some of its services to customers, including through various foreign subsidiaries. For instance, it holds an Australian Financial Services License issued by the Australian Securities and Investments Commission to provide non-cash payments in Australia, and it is licensed as an Electronic Money Institution to provide payments services and electronic money in the United Kingdom by the Financial Conduct Authority and in the European Union by the Central Bank of Ireland.
The Consumer Financial Protection Bureau and other federal, local, state, and foreign regulatory and law enforcement agencies regulate financial products and enforce consumer protection laws, including those applicable to credit, deposit, and payments services, and other similar services. These agencies have broad consumer protection mandates, and they promulgate, interpret, and enforce rules and regulations that affect the company's business.
The company is subject to anti-money laundering (‘AML’), anti-corruption, and economic and trade sanctions laws and regulations in the United States and other jurisdictions in which it operates. The anti-corruption laws, such as the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act, generally prohibit companies from making or offering improper payments to foreign government officials and political figures for the purpose of obtaining or retaining business or to gain an unfair business advantage. Economic and trade sanctions programs that are administered by the U.S. Department of the Treasury’s Office of Foreign Assets Controls and equivalent applicable foreign authorities prohibit or restrict transactions to or from, or dealings with, specified countries, governments, individuals, and entities, including narcotics traffickers and terrorists or terrorist organizations. The company has implemented compliance programs and controls designed to comply with the laws and regulations to which it is subject.
The company obtained approval from the Federal Deposit Insurance Corporation (‘FDIC’) and the Utah Department of Financial Institutions to open an ILC. The opening of Square Financial Services, Inc., the company’s ILC, in March 2021 subjects it to direct state and federal regulatory supervision and requires compliance with applicable banking regulations. Its partnerships with FDIC-insured financial institutions to offer certain banking products to customers also subject it to certain federal banking regulations.
Various laws and regulations govern lending in the United States and internationally. In the United States, Square Capital, LLC holds and maintains lending and collections licenses with state regulators to support lending products offered across the United States. Afterpay US Services, LLC holds and maintains lending licenses to support its product offerings. These lending licenses subject the company to the supervision and examination authority of state regulators, and its partnerships with FDIC-insured financial institutions to offer certain lending products to customers subject it to federal regulation and supervision.
The company's subsidiary, Cash App Investing LLC (‘Cash App Investing’), operates as a broker-dealer and is therefore registered with the Securities and Exchange Commission (‘SEC’) and a member of the Financial Industry Regulatory Authority (‘FINRA’). As a broker-dealer, Cash App Investing is subject to SEC and FINRA rules and regulations concerning matters that include, without limitation, how it markets its services, handles customer assets, keeps records, and reports to the SEC and FINRA. Cash App Investing is also registered in each state where it conducts business, and subject to those states’ securities laws and regulations.
The company collects and uses a wide variety of information for various purposes in its business, including to help ensure the integrity of its services and to provide features and functionality to its customers. This aspect of the company's business, including the collection, use, disclosure, and protection of the information it acquires from its own services as well as from third-party sources, is subject to laws and regulations in the United States, the European Union, and elsewhere.
The company sends texts, emails, and other communications in a variety of contexts, such as when providing digital receipts and marketing. Communications laws and regulations, including those promulgated by the Federal Communications Commission, apply to certain aspects of this activity in the United States and elsewhere.
Seasonality
Historically, transaction-based revenue for the company's Square ecosystem has been strongest in its fourth quarter and weakest in its first quarter (year ended December 31, 2024), as its sellers typically generate additional GPV during the holiday season. Subscription and services-based revenue generally demonstrates less seasonality than transaction-based revenue. Hardware revenue generally demonstrates less seasonality than transaction-based revenue, with most fluctuations tied to periodic product launches, promotions, or other arrangements with its retail partners.
Historically, the company's Cash App ecosystem has experienced improvements in revenue, gross profit, and inflows related to the distribution of government funds as customers have deposited more funds into Cash App during these times, including during the first quarter when the U.S. tax refunds are typically distributed. Typical seasonality trends for the Cash App ecosystem are also impacted by bitcoin revenue, which is driven by customer demand and the current market price of bitcoin.
History
The company was founded in 2009. It was incorporated in Delaware in 2009. The company was formerly known as Square, Inc. and changed its name to Block, Inc. in 2021.
