Affiliate Testing of Buy Now Pay Later Integration into Cash App Card Transactions

The integration of Afterpay’s buy now, pay later service with the Cash App Card is currently under beta testing. This initiative aims to offer BNPL loans across the entire peer-to-peer platform through Cash App.

Afterpay and Block, Inc.’s Acquisition History

In 2021, Block, formerly Square, acquired both Afterpay and Cash App. Launched in 2013, Cash App has amassed a user base of 57 million, with 40% using the Cash App Card.

Growing Popularity of BNPL

BNPL services like Afterpay’s pay-in-4 loans are gaining traction among consumers. According to Ben Danner, a Senior Credit and Commerical Analyst at Javelin Strategy & Research, “BNPL is popular, with vendors and issuers competing for consumer spend.”

Fee Implications

Afterpay will charge a small fee for BNPL transactions on the Cash App Card. This could indicate an industry trend toward card-linked financing with fixed fees.

Concerns Over Phantom Debt and Regulation

The surge in popularity of BNPL loans has raised concerns about mounting debt, dubbed “phantom debt,” as these providers are not required to report transactions to the NY Federal Reserve. This led the Consumer Financial Protection Bureau to issue a rule requiring more transparency from BNPL services.

Future Trends

The increasing demand for point-of-sale BNPL options suggests that more companies will follow Block’s lead in integrating these services into their platforms, akin to Apple Pay now supporting Affirm’s BNPL products.

Nick Molnar, CEO and Co-Founder of Afterpay, noted, “Providing customers already using the Cash App Card with the ability to pay in four installments is a significant opportunity.”