Digital payments company Block added its Afterpay buy now, pay later option to some customers’ Cash App debit cards this week, a top executive from the payments company Block said during a Thursday earnings webcast.
“We've got a lot of opportunity ahead of us as we think about buy now, pay later Afterpay on the Cash App card, which we're launching this week,” Block Chief Financial Officer Amrita Ahuja told investors and analysts during the webcast.
Oakland, California-based Block, which owns Cash App, started rolling out its signature buy now, pay later product on the debit cards Tuesday, a Block spokesperson said.
Afterpay is now available to eligible cardholders in 20 states and the District of Columbia, including Ohio, Indiana, Florida, Arizona, and Texas, the spokesperson said.
“We are rolling it out to new customers after a year of strong testing,” said Ahuja, who is also the company’s chief operating officer. “We see this product as another way for customers to manage their money and to drive increased spending through the Cash App card.”
The debit card had about 25 million monthly active users as of December, according to the earnings report this week. A letter to shareholders accompanying the earnings report also noted that buy now, pay later users tend to be younger, with the majority coming from Gen Z. That creates “a valuable opportunity to meet the spending habits of this demographic, expanding both usage and engagement,” the letter said.
Ahuja disclosed the company’s plans to add Afterpay to Cash App cards during a November earnings call, but did not say at the time when that would happen.
Block finalized its purchase of Afterpay in 2022 after agreeing to pay $29 billion to acquire the BNPL provider in 2021.
A Block spokesperson declined to say which Cash App cardholders will be eligible for Afterpay.
“We are continuing to review availability across the U.S.,” the spokesperson said in an email. “We’ve rolled out initially in these states as we test and learn.”
Block posted a fourth-quarter gross profit of $2.31 billion up 14% from the $2.03 billion for the same quarter in 2023.
The company reported $6.03 billion in segment revenue for the fourth quarter, up roughly 4.5% from the $5.77 billion it reported in the same quarter in 2023.
Analysts saw positive signs for the integration of Afterpay onto the Cash App card.
“Faster gross profit growth should be powered by the recent integration of BNPL” on the card, analysts for the investment firm William Blair wrote in a note to investors Friday.
The addition of the buy now, pay later product will help Block better monetize its user base, Citizens Bank analysts wrote in a note to investors Thursday.
However, Block “is making significant investments to grow awareness of its services to consumers and Square merchants, suggesting to us that user and merchant growth will be more challenging and expensive going forward,” the Citizens analysts added.
