Square ( SQ Quick Quote SQ - Free Report) has raised its bar in the contactless payment game on the heels of its new touch-free payment solution namely Cash App Pay. The company has made Cash App Pay available to its sellers across the United States through a software update. Sellers will be now able to accept payments made by customers using their Cash App account either by scanning the QR code at checkout or by clicking a button on their mobile devices. Sellers are now allowed to accept such payments for both online and offline purchases. Further, sellers are not required to get additional hardware support or any technical integration to accept payments via Cash App Pay. Sellers will be able to manage Cash App Pay’s receipts, reconciliation and settlements in their present Square ecosystem. We note that the move will not only deliver a contactless payment experience to customers but will also allow sellers to offer touch-free payment options to their customers. This, in turn, expands their reach to customers. Move Holds Promise
We believe that the latest move will strengthen Square’s position in the booming contactless payment market, which is expected to hit $18 billion by 2025 by witnessing a CAGR of 11.7% between 2020 and 2025, per a report from MarketsandMarkets.
The fast-paced world, which was already experiencing the growing adoption of mobile wallets and online payment apps in the pre-pandemic era, has been constantly witnessing an increasing proliferation of cashless payment transactions since the onset of the coronavirus pandemic. The intensifying fear of contracting COVID-19 along with the imposition of social-distancing and stay-at-home restrictions across the world has triggered contactless transactions. Digital wallets have become mainstream, while cash and physical debit/credit cards have taken the backseat amid the pandemic. Further, the QR code payment system has become a game-changer in the digital payment industry. A spike in payment transactions by scanning QR codes at offline stores remains noteworthy. Hence, Square’s step with Cash App Pay remains positive. Intensifying Competition
Given the growing proliferation of cashless payments not only by Square but also other companies like
PayPal ( PYPL Quick Quote PYPL - Free Report) , Alphabet’s ( GOOGL Quick Quote GOOGL - Free Report) Google, Apple and Amazon ( AMZN Quick Quote AMZN - Free Report) are making concerted efforts to capitalize on the above-mentioned growth prospects. Google is deepening its focus on delivering a better user experience. The company offers users more choice and control to manage their transaction data on Google Pay. PayPal’s Venmo, which enables the transfer of money between family and friends via mobile devices seamlessly, remains noteworthy. Its expanding Instant Transfer services to the global markets is another positive. Meanwhile, Apple and Amazon are gaining solid traction on the back of their payment apps — Apple Pay and Amazon Pay, respectively. Nevertheless, Square’s latest move is likely to give strong competition to these players on the back of the growing popularity of the Cash App and its user-friendly interface. Currently, Square carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.