Square’s mobile payments application, Cash App, posts impressive growth for Bitcoin transactions despite the bearish cryptocurrency market. In Square’s Q3 shareholder letter the company reports $43 million in Bitcoin revenues, contributing $560 thousand to quarterly net profit.
Square is a merchant services and mobile payments company based out of San Francisco. Founded in 2009, the company is known for its portable point of sale systems such as Square Reader and Square Register. Since inception, Square has become one of the most popular payment services for small and medium-sized businesses in the United States.
In a series of progressive moves, Square was one of the first major payment processors to support Bitcoin transactions.
The company made its first foray into crypto payments in March of 2017 when Square Market, a tool for establishing eCommerce storefronts for small businesses, would also support Bitcoin payments.
The company continued to push for Bitcoin support in its more widely used Cash App (formerly Square Cash). Cash App is a mobile application that allows individuals and businesses to send and receive money through an online alias.
Square moved to beta test Bitcoin payments in November of 2017, and by January of 2018, the company had released the feature to most of Cash App’s users.
The move puts Square head-to-head with several incumbents in crypto payments processing. BitPay, an incumbent since May of 2011 and Coinbase Commerce a new entrant as of February of 2018.
Another competitor, PayPal’s Venmo is yet to offer any cryptocurrency support. Square’s push into the cryptocurrency market led to a surge in downloads for Cash App, surpassing Venmo mobile money service. Cumulative downloads for the Cash App now total 34 million, exceeding Venmo’s 33 million for the first time ever, according to data aggregated from the Google Play and Apple App stores.
Square is one of the first mainstream payment processors to tackle the shortcomings of cryptocurrency payments. Issues such as price volatility, long confirmation times, and poor ease of use still make cryptocurrency a cumbersome option for retail payments. However, Square is tackling many of these issues head-on.
By leveraging its large user base and popularity among small businesses it is possible Square could become a leader in crypto payment processing.
According to Square’s Q3 shareholder letter, the company had revenues totaling $43 million related to Bitcoin transactions, up 16 percent from last quarter. The transactions contributed $560 thousand to the company’s net income, up 33 percent from last quarter, with a net margin of 1.3 percent on all Bitcoin transactions conducted through the service.
These figures indicate impressive growth in transaction volume despite the bear market. Since the release of Cash App’s Bitcoin support, cryptocurrency market capitalization has decreased by approximately 66 percent while Bitcoin transactions on Cash App grow unabated. This consistent quarterly growth may signal growing adoption despite the decreases in market capitalization.
Square is making strides in addressing the issues that make cryptocurrency impractical for payments in brick-and-mortar stores. As cryptocurrency becomes easier to use mass adoption will follow.
Square’s stock is up 218 percent from this time last year, down 4 percent in the last month.
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