With commerce evolving beyond physical money and as consumers look for convenience, payment apps are playing a critical role on both the customer and merchant side.
When it comes to payment apps, PayPal’s Venmo and Square’s Cash App have become the most popular, attracting tens of millions of users.
According to data from Piper Sandler’s Fall 2021 Teen Survey, Venmo had the highest penetration at 41%, followed by Cash App. However, PayPal’s penetration dropped to 41% (from 47%), while Cash App improved to 34% (from 28%).
Investment Implications
Both companies are moving quickly to offer a seamless user experience and additional functionality. Since the launch of Cash App, Square has taken the product beyond a simple peer-to-peer payment app, and with enough functionality to act as a digital banking solution.
Today users can buy and sell stocks and bitcoin, deposit checks and cash, order a physical Cash Card, and even borrow money. Cash App boasts over 40 million monthly active customers. Wells Fargo only has 33 million digital active customers, for reference.
Other offerings like Buy Now Pay Later have become greatly popular as well. Once again, PayPal leads the way with their “Pay in 4” service, while Square’s AfterPay continues to gain traction. Both are now used by ~1/3 of teens in the U.S.
Going forward, it will be interesting to see how the rankings change, especially as new products and competitors come to market.
Twitter: @_SeanDavid
The author or his firm may have positions in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
