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Square sales jump as virus fears accelerate "the death of cash"

Thursday, August 6, 2020 by Robinhood Snacks |
"_What's that paper stuff?_"

"What's that paper stuff?"

When Twitter is the side hustle... Not too shabby. Twitter co-founder Jack Dorsey's (much more valuable) baby Square had a blowout quarter. The mobile payments company's sales soared 64% as people ditched cash. Square makes most of its money from you swiping your card through one of its white tablets (or iPhone plug-in readers) at a craft coffee shop. But...

  • Since small businesses shuttered last quarter, Square’s sales from core sellers fell 9%. Square wasn't getting a cut of your carne asada card swipe at the local taco joint.
  • The real star of the show was Cash App, Square's peer-to-peer payment app — the amount of money customers stored in the app jumped 86% from the previous quarter.
  • Square stock surged 15% on the news and has more than doubled for the year.

Haven't touched a $20 since 2019... Turns out that contactless payment options thrive during a pandemic. Last week, Venmo-owner Paypal reported its strongest quarterly earnings ever. Profit surged 86% on lockdowns and germ-avoidance.

  • 70% of people "fear for their health" at the cash register, according to Paypal. That helped it add more users in 3 months than in all of 2016.
  • "The death of cash" is accelerating thanks to the rise of digital payments. Credit cards hurt cash, but QR codes and digital transfers could kill it.
THE TAKEAWAY

The "Death of Cash" has a dark side... There are no truly cashless societies (yet), but some are close — Only 2% of Sweden's transactions are cash and QR code payments are prevalent in China through apps like WeChat Pay. While a more cashless America could lower crime, it could also infringe on privacy and hurt lower-income segments. Going cashless increases the digital divide when 6% of American adults have no bank account and 16% are underbanked.