Dive Brief:

• Block is expanding the availability of its Afterpay buy now, pay later service to eligible holders of its Cash App payment card, the digital payments company said in a Tuesday press release.
• Afterpay loans for Cash App cardholders are offered through First Electronic Bank on the Visa network, but aren’t guaranteed, the release said.
• The company underwrites the short-term loans using customers’ cash flow data and financial behavior, per the press release.

Dive Insight:

Last year, Block, the parent company of Cash App, launched the Afterpay integration to select customers in 20 states, including Indiana, Ohio, Arizona, Texas and Florida. The company began offering the service to some users after a year of testing, Block’s chief financial officer, Amrita Ahuja, said at the time. 

That was after initially announcing in 2024 that it would make the BNPL service available to Cash App cardholders. Block agreed to pay $29 billion to buy Afterpay in 2021.

Block said its latest move is making the BNPL service more broadly available for consumers, so they’re unconstrained by which merchants offer access to such services. 

The Oakland, California-based company said it’s targeting the card service at lower-wage workers, like hourly employees and gig workers, expecting they’ll use it for everyday purchases such as groceries and gas, or perhaps to pay for utilities.

In the release, Block provided an example of how financing charges would look for a consumer using the Afterpay service on a Cash App card to make a $240 purchase. In that instance, the company charges customers a flat 7.5% finance fee and a fixed annual percentage rate of 65.15%, requiring them to repay the loan within six weeks, the release said.

Before launching the tool to its millions of active users, Block found during its pilot that over three in five users who have transacted with Afterpay on Cash App have used the service at least five times, according to the press release. The repeated use signals that users will rely on the BNPL service as part of their regular cash flow, the company said.

Block is “giving eligible customers the flexibility to pay over time for any purchase, not just the ones a merchant has opted into,” Owens Jennings, executive officer and head of business at Block, said in the release. 

Block’s BNPL rollout follows a quarter of revenue gains and staff cuts. The company’s first-quarter gross profit jumped 27% year over year to $2.9 billion, and its revenues rose 5% to $6.1 billion. In February, Block slashed its employee headcount by 40%.