Square’s Bitcoin-Related Cash App Dominates Earnings Call Q&A

Square’s Cash App performance isn’t reflected in the company’s top and bottom lines yet, but the company still sees opportunities in monetizing Bitcoin.

As Square looks for opportunities to grow in the payment space, Bitcoin continues to present itself as a feasible way to do so.

This message was one of many to come from the company’s fourth-quarter 2017 earnings call that was held this week. Square investors were given more of an idea about how Square could further incorporate Bitcoin into its business.

Here, we’ll go over some of the details.

Cash App paying off?

Last month we reported to you that Square had expanded its Cash App to allow more users to buy and sell Bitcoin with their phones. The app was rolled out to select users last year, but now the number of users has been expanded to include most of its customers.

As far as the impact of Cash App on Square’s Q4 results, there’s nothing there, noted the company’s CFO Sarah Frair.

“It was really immaterial. We were just beginning with the product and it was really as we head January that we fully rolled out Bitcoin – the ability to buy and sell Bitcoin in Cash App to 100% of all of our customers, which is a really exciting milestone.”

Square CEO Jack Dorsey said about the app:

“We are really proud of the work we accomplished this past year with the Cash App, which had more than seven million monthly active customers in December. An individual can set up the app in minutes and send peer-to-peer payments, store money, receive their paycheck and buy and sell Bitcoin.”

One participant on the earnings call asked if Square had “any plans to go straight to the merchant online even potentially using Bitcoin for that?”

Dorsey responded by saying:

“We currently benefit a lot from our partnership model with cash and through [the] register. So we will continue to amplify that. Bitcoin for us is not stopping at buying and selling. We do believe that this is a transformational technology for our industry and we’re going to learn as quickly as possible.”

Monetizing Bitcoin

Dorsey noted that Square’s execs believe Bitcoin provides an opportunity to provide more people access to the financial system.

“We’re continuing to look for opportunities to be industry leaders here. So a lot of what we’re doing is in flux and as we learn we have stronger answers.

On how Square monetizes Bitcoin today, Friar said the company offers to the buyer the ability to purchase or to sell their ownership in the Bitcoin without added fixed fees.

“We include a cushion or a margin in the price effectively to allow us to account for the fairly dynamic market that we see for Bitcoin.’

She added that the company had “kept a very small amount of Bitcoin…”

“That allows us to just add a little bit more liquidity as we are growing, but our intent is not to hold a lot of Bitcoin on the balance sheet.”

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