Block finishes up 2021 strong, plans to bolster growth with Afterpay

By the numbers: Block’s gross payments volume (GPV) jumped 45% year over year (YoY) and hit $46.3 billion, per its shareholder letter. GPV growth accelerated from both the previous quarter (+43% YoY) and the same period last year (+12% YoY).

Key context: Block changed its name in early December to highlight its focus on things like cryptocurrencies and its seller business. On the company’s earnings call, CEO Jack Dorsey said Block now comprises four business units: Square, Cash App, music-streaming service Tidal, and TBD. (No details were provided on the final unit besides that it’ll service Bitcoin developers.)

How we got here: Block targeted larger, “more complex” merchants last year, in part by doubling down on business management tools like Square Invoicing Plus, which integrates with its core payment solutions.

Those efforts are paying off: In Q4, 37% of Block’s seller GPV came from merchants that earned at least $500,000 in GPV—compared with approximately 30% in the same period in 2020. New seller solutions also increased the firm’s profits: Chief financial officer Amrita Ahuja said 80% of Square’s gross profits came from sellers using two or more of its products, and 38% came from those using four or more.

What’s next? Block plans to use Afterpay to tighten connections between its Square and Cash App ecosystems and grow its global user base.

• Block started letting sellers offer recently acquired Afterpay’s BNPL solution in January. Dorsey told investors Afterpay can help Block attract much larger retailers and that there were also cross-selling opportunities between Square sellers and Afterpay customers. Block is already experimenting with integrations like a search function that lets Cash App users discover BNPL offers and Afterpay merchants, which could give the BNPL provider more visibility.
• Block may also bring Cash App to new markets—it's already live in the UK, where Dorsey says there’s been “steady growth.” Block acquired European financial app Verse in 2020 and has been using it to learn about peer-to-peer payments behavior in Europe, according to Dorsey.
• In November, Cash App opened its ecosystem to teen users: So far, Block has seen “encouraging adoption.” Ahuja said this demographic is typically underserved by traditional financial services—so there may be an opportunity for Block to develop new offerings that cater to their needs as young consumers. Doing so can help Block tap into an addressable market of 20 million US consumers who are early in their financial lives and may therefore stick with Block as they become high-earners.

Related content: Check out “The Point-of-Sale” report to learn more about what Block has done to attract sellers and boost payments volume.