Block scales its mobile platform into banking in the US


Through this move, Block aims to place Cash App, which, according to the company, has 57 million active users, as a banking option for households across the US. The app provides high-yield savings accounts, debit cards, short-term lending, and BNPL options through Afterpay. Additionally, 2.5 million users deposit their paychecks directly into Cash App, with Block mentioning a 25% year-over-year expansion.

Block scales its mobile platform into banking in the US

However, converting Cash App’s active users into banking customers could pose difficulties for Block, as, despite expansion in services, the company’s stock is witnessing a 32% year-to-date drop. Commenting on the news, representatives from Block mentioned that their company’s objective is to evolve from a peer-to-peer payment app to a full-service banking platform that could serve the needs, demands, and preferences of users.

Furthermore, through Cash App, Block intends to provide services to a wider range of individuals, including those who typically do not have access to the financial system. With the mobile platform, the company seeks to facilitate access to core money management tools and allow optimal spending, savings, borrowing, and investing.

Block’s violations of AML regulations

Besides facing competition from other industry participants, such as Chime and Robinhood, Block also recently dealt with regulatory scrutiny over violations of the Bank Secrecy Act after a joint enforcement action by 48 financial regulators. The agencies determined that Block imposed insufficient policies for money laundering via Cash App without providing specifics about the shortcomings. At that time, the company agreed to pay a USD 80 million fine, cooperating with the states in the settlement, including Arkansas, California, Massachusetts, Florida, Maine, Texas, and Washington State.
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