Dumb question, how does CashApp make so much money? Isn't it a free app with no fees? I have to imagine the free 1-3 business day deposit is highly preferred to the 1-3% transaction free instant-payment-deposit feature.

Block has an accounting quirk where they report Bitcoin that users purchase through CashApp under "revenue".

Revenue feels like the wrong place for this number to show up, but the result is that it inflates their revenue number

They are legally required to report it that way. The quarterly shareholder reports include revenue with and without Bitcoin.

Which is amazingly transparent for a public company to do.

Purchasing Bitcoin as revenue?

I am not sure the justification of it. Ages ago the debate was, if bitcoin was asset, currency or commodity? But how does buying something through an exchange results in the asset's entire price to be recognized as revenue for the company? They are doing it only for Bitcoin, not for any other things. I have no clue because it doesn't make sense.

From the 10-k [0]

...customers access to hundreds of listed stocks and ETFs, as well as the ability to buy and sell bitcoin. Stocks, ETFs, or bitcoin can be purchased...e. For bitcoin buying and selling, we recognize revenue when customers purchase bitcoin and it is transferred to the customer's account.

...During the year ended December 31, 2021, we saw a significant increase in total Cash App revenue, primarily from bitcoin revenue which contributed 57% of total consolidated net revenue in 2021, and 48% of the total increase in consolidated net revenues in 2021

[0] https://www.sec.gov/Archives/edgar/data/1512673/000162828022...

I’m not an accountant and just guessing here, but I’m thinking it’s because it’s treated as a purchase of an asset or a good. Similar to how if you went and bought a refrigerator, the appliance store would book what you paid them for the fridge as revenue.

It seems crypto can have multiple definitions based on what’s most convenient at the time.

I posted to r/accounting.

Two people there said that, it maybe is transaction fees. But they have asked me to look into the numbers. I think they are right, but I still find the phrasing to be quite ambiguous tbh.

https://www.reddit.com/r/Accounting/comments/tzbg6i/what_is_...

Why, dark patterns of course. They've managed to trick my mother into using the instant feature by moving the UI elements around at least once.

CashApp made most of their money through Bitcoin and the exchange fees (something like 70% in 2021?). Additionally, they charge extra for instant transfers in and out of CashApp. I believe its 1.5%.

Lastly, they also make money by keeping the Cash in the CashApp/Square network. Since it is all within Block, they will not have to pay interchange fees when a customer pays with CashApp to a Square merchant.

Lots of comments related to Block revenue wrt Bitcoin that needs some context. Block is making inflated revenue because they're legally required to report buying a Bitcoin for $49.5k and selling for $50k as $50k in revenue, even though their profit will be negligible. Since their bitcoin fees, their gross profit is a much better metric, as how many bitcoins they're skimming, adding to inflated revenue metrics, is meaningless.

There's also money left in Cash App after someone pays you.

you can do a lot with 3 days of money.