Block recently expanded Afterpay, its buy now/pay later product, into its Cash App Card as it hopes to capitalize on Gen Z's aversion to credit cards. The integration is the company's first step in unifying its three business lines into what it calls a "neighborhood network."
Afterpay on Cash App Card is a post-purchase product that enables Cash App Card users to split purchases greater than $25 made within the last seven days into two or four interest-free, biweekly payments. Customers can manage the offering directly in the Cash App app.
The integration is the next evolution of Afterpay following Block's
"The past few years, after we acquired Afterpay, we were really focused on the Afterpay business itself, making sure it was really healthy and thriving and winning market share against competitors," Bullitt said.
"Now that Afterpay feels really healthy and in a great spot, we've sort of turned our attention to… taking advantage of the Cash App customer base, because we think that's what makes us really unique and different versus all the other competitors out there," she said.
Cash App Card had more than 25 million monthly active users as of Dec. 31, 2024, according to Block's
The rollout comes after a year of pilot testing, Block's Chief Operating Officer and Chief Financial Officer Amrita Ahuja said on the company's call with investors Feb. 20. During that beta, Afterpay logged nearly $150 million in BNPL originations, she said.
Any adoption of Afterpay on Cash App Card going forward would represent a windfall, Bullitt said. "Even a small percent of our active customer base on Cash App using Afterpay's products, that's a pretty meaningful driver for growth for both Afterpay and Block overall," she said.
Integrating Afterpay into its peer-to-peer app is a differentiator for Block, Ben Danner, senior research analyst at Javelin Strategy & Research, told American Banker.
"This isn't going to be a pure play BNPL app or something like Affirm Card or Klarna Card. This is a P2P app that is enabling its customers to do buy now, pay later," Danner said.
Block is hoping to capitalize on younger generations – especially Gen Z – that have an aversion to credit cards. According to Afterpay research, only 35% of Gen Z consumers actively make purchases with a credit card, and 51% of Gen Z said credit cards give them the "ick," which is a slang term used by younger generations to convey disgust. Nearly 70% of Gen Z are likely or extremely likely to opt for BNPL options, and more than half of Gen Z respondents said they could better manage their finances using BNPL compared to other payment methods, such as traditional credit cards, according to Afterpay's research.
Nearly half (47%) of consumers say BNPL allowed them to make a purchase; however, 60% of Gen Z and 66% of millennial consumers report being likely to use BNPL in the future, compared to only 31% of boomers, according to research from
Block is also hoping that increased visibility for Afterpay will drive brand recognition and BNPL volume outside of Cash App, Bullitt said.
"We're introducing Cash customers to the brand of Afterpay, and so now there's something they'll become familiar with," she said. "We imagine more of them will use Afterpay to check out. And so this alone will drive Afterpay usage."
Afterpay has tens of thousands of merchants on its network, Bullitt said.
But Afterpay will have to compete with other "
"Everyone wants to launch an app and have their own kind of unified app."
