The word “block” may have a number of meanings, but for Square Inc. it could mean a stronger emphasis on blockchain. That’s how some observers interpret the company’s announcement Wednesday afternoon that it is changing its name effective Dec. 10 to Block Inc., a dozen years after its founding as Square.
Under chief executive and crypto enthusiast Jack Dorsey, Square has been a champion of digital currency, specifically Bitcoin, for years now, and the executive has been clear that he sees blockchain technology playing an increasingly big role in Square’s future. Already, at $1.82 billion in revenue, Bitcoin activity accounts for nearly half of the company’s revenue, according to its third-quarter earnings report. Indeed, the ability to buy, sell, and spend Bitcoin has been a central feature of the company’s Cash App wallet for years. Now, as part of Wednesday’s changes in nomenclature, the company’s Bitcoin business is adopting the name Spiral.
The overarching name change to Block, which comes with a thorough redesign of the company’s Web site, “positions [the company] to be more expansive in that space,” notes Thad Peterson, who follows digital wallets at Aite-Novarica Group, a Boston-based consultancy. “I don’t see much of a downside to it,” he adds, addressing the potential for confusion after more than a decade of identification as Square.
The name Square will be retained to identify the company’s acquiring business, which includes the Square-designed hardware and software physical merchants use to process transactions. As an operating unit within the company, Square will thus join Cash App and Tidal, a video and music-streaming service in which Square has an interest.
While Square began with, and perhaps remains best known for, that merchant business, the change to Block could now help identify the company more broadly, some observers say. “Square now has a banking license, and they’re creating a financial-services company, so they needed a brand that isn’t so tightly associated with the point of sale,” observes Patricia Hewitt, principal at PG Research and Advisory Services in Savannah, Ga.
The suddenly announced unveiling of Block is nonetheless somewhat startling, coming as it does just 48 hours after Dorsey’s resignation as chief executive at Twitter Inc., which, like Block, is a company he helped found. Observers like Peterson see the events as connected. With a new identity for Square, he says, Dorsey may need to concentrate his energies on driving a new set of strategies. Wednesday’s change to Block “positions [the company] more strongly for the future,” Peterson adds.
In fact, the other shoe may not yet have fallen in this series of major changes. First, the announcement of Dorsey’s resignation at Twitter, then the quick change from Square to Block. “It would imply there will be a day 3 or day 4” with more announcements, says Peterson.