Square is reported to be trialling ‘short term loan facilities’ as a potential new service for the US customers of its peer-to-peer ‘Cash App’ technology.
Branded as Wall Street’s ‘biggest mover’ last week following the publication of its 2020 interim statement, in which it outperformed ‘all market consensus’, Square is reported to be testing the new products to transition its business beyond payments.
The Silicon Valley firm confirmed to TechCrunch that it had tested a ‘micro loan lending’ feature on 1,000 select customers, but underlined that it held no formal plans to launch a lending service.
Trialled through its flagship Cash App, Square is reported to have offered test users access to micro-level loans of between $5-to-$200, featuring a four-week repayment alongside a flat fee interest rate of 5%.
Square’s test run of short-term loans has caught tech observers’ attention, as Jack Dorsey’s ‘other company’ attempts to tackle a complex and divisive issue of alternatives to ‘payday loans’.
Publishing its interim results, Square revealed that Cash-App transactions alone generated $1.20 billion of corporate revenue, delivering gross profits of $281 million.
Recognised as one of North America’s leading mobile payment devices, Cash App reported that it had garnered over 25 million customers in 2020, with accelerated take-up of its contactless services due to COVID-19 circumstances.
Square founder Jack Dorsey maintains that the payment firm’s next evolution will focus on the development of products to help its customers improve their personal finances.