Square eyes the digital investing space

Square eyes the digital investing space
With 7 million people using its cash app, some as their only bank account, the company could disrupt the robo-advice market.
SEP 20, 2018
Count Square, the fintech company launched by Twitter CEO Jack Dorsey, among the technology startups looking to expand into the digital investing and advice markets. Speaking at Recode's Code Commerce conference, Square chief financial officer Sarah Friar said the company is actively exploring what to do with the roughly $209 million it holds on behalf of customers using its Cash mobile payments app. "And we're starting to think about, are there other things we could do for our customers there? Maybe help them with their savings," Ms. Friar said. Lots of ideas are on the table, including savings and investments. "We actually already allow people to purchase bitcoin, for example, which we think of as allowing them access to an asset," she said. While buying cryptocurrency is "jumping three steps ahead" of what most people would do first with extra cash in an account, Ms. Friar hinted that other types of accounts could be forthcoming. "Anything you do today with a bank account, you should look to the Cash app to begin to emulate more and more of that," she said. (More: Merrill adds Zelle to wealth management app to let clients make payments) Square launched Cash in 2015 as a way for people to send money directly to peers using their smartphone. But the company noticed many customers are using the app as their primary bank account, and in some cases their only bank account, Mr. Dorsey said in May. "We are reaching an audience that is under-served and even to the point of unbanked, which wasn't a stated goal but it's something we love and want to lean into more," he said. The app has 7 million active users, and its downloads have grown 128% year-over-year each month since 2016, compared to competitor Venmo's 74% growth, according to a CNBC report. Square already has an FDIC license to issue loans across the country. If the company introduces investments beyond bitcoin and provides access to retirement accounts, it wouldn't be hard to tack on automated advice (or integrate with an existing robo-adviser). Square could use its existing audience to make a disruptive move into the digital advice market. (More: Amazon could be in prime place to shake up asset management industry) You can watch the full interview with Ms. Friar below.

Latest News

Carson Group adds $405M Northwestern Mutual team in Atlanta
Carson Group adds $405M Northwestern Mutual team in Atlanta

Yari Capital's move to Carson continues a run of additions for the $62 billion firm, days after it hired a veteran recruiter from Osaic.

Wealth Enhancement inks 'coming home' deal with Oklahoma RIA
Wealth Enhancement inks 'coming home' deal with Oklahoma RIA

Servo Wealth Management's $210 million book brings the Minneapolis consolidator's total client assets further past $160 billion.

Omaha-based RIA Stevens Capital Partners nears $1B, buys Dallas CPA firm
Omaha-based RIA Stevens Capital Partners nears $1B, buys Dallas CPA firm

The deal to acquire a 300-client tax firm sets up much-needed succession for its 80-year-old founder, while joining a widening trend of tax service integration among RIAs.

Most Americans oblivious to Social Security’s projected demise
Most Americans oblivious to Social Security’s projected demise

New Nationwide Retirement Institute survey reveals eight in ten Americans agree Social Security needs fixing and how.

NewEdge advisors reshape client work with AI in weeks after Anthropic rollout
NewEdge advisors reshape client work with AI in weeks after Anthropic rollout

Advisor-led adoption has been rapid for tasks from translating annuity contracts into plain English to speedy webinar prep.

SPONSORED Direct indexing webinar targets tax-loss harvesting amid market swings

Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income