How Block Is Bringing Installments to Cash App

Installment payments became a hot item in the payments industry a few years ago with services like buy now, pay later, but now the trend is extending to peer-to-peer payments. Block Inc. early Thursday said its Cash App technology now offers pay-over-time capability for money transfers, a service the San Francisco-based company says is a first of its kind.

The new capability allows Cash App users to translate “recent” P2P transfers into short-term installment loans, Block says. The sum of the payment is immediately credited to the user’s account, and the user becomes responsible for repaying the sum in weekly installments, according to Block’s announcement.

Block points out that users are already accustomed to pay-over-time capability from their use of credit cards, so the new service “builds on that existing behavior by extending a familiar experience to more transaction types within the app,” according to Owen Jennings, executive officer and head of business for Block, in a statement. Cash App has an estimated 50 million to 57 million monthly active users, according to some sources, most of them in the United States.

The new service carries a fee upfront, Block says, and involves a fixed term, no compounding interest, and coverage of payments of $25 or more sent within the prior 30 days. The upfront fee could not be immediately determined.

Block has offered similar capability through Cash App before. The app introduced an installment-payment capability a year ago for debit card transactions. Now, Block says, the expanded service “reflects the growing demand for installment options beyond traditional merchant checkout experiences”

Cash App emerged in 2013 as Square Cash, and became a dedicated mobile app the following year. In 2015, the so-called $Cashtag emerged as a unique identifier to enable transfers without email addresses or phone numbers. The product also features a physical Cash App card.