Here’s how Cash App’s CFPB fine and enforcement action can benefit the P2P provider

The news: The Consumer Financial Protection Bureau (CFPB) ordered Block to pay $175 million over what the agency claims was a failure to protect Cash App customers from fraud, per a press release.

• Block will have to pay up to $120 million in refunds and other redress to harmed customers and pay a $55 million penalty to the CFPB’s victims relief fund.
• Block will also have to set up a 24-hour live-person customer service and fully investigate unauthorized transactions and provide timely refunds when appropriate.

The CFPB claims Block employed weak security protocols for Cash App, closed reported fraud cases without proper investigation, discouraged users from seeking help, and deprived users of effective customer service.

What this means for Cash App: This enforcement action could actually be beneficial for Cash App in the long run.

• The $175 million in payments won’t dent its profits. Block’s gross profit totaled approximately $7.5 billion in 2023. Around $4 billion of that came from Cash App.
• And the refunds and redress for customers could help rebuild trust among them.
• Setting up a live-person customer service support and fully investigating claims should not be too onerous for the company and can also help to improve the user experience.

Our take: This enforcement action offers Block and Cash App closure on the CFPB’s investigation—unlike its peer-to-peer (P2P) payment competitor Zelle, which faces a CFPB lawsuit over its own fraud prevention practices.

While Zelle could face a lengthy and uncertain legal battle, Cash App will be able to pay the fines, implement the changes, and then move on and focus on growing its business: We forecast Cash App’s P2P transaction value will jump 12.6% YoY in 2025, totaling $145.86 billion.

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