We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Could Block's BNPL Moves Reshape Its Financial Ecosystem?
Read MoreHide Full Article
Key Takeaways
Block integrated Afterpay into Cash App, expanding BNPL tools to 57M monthly active users in March.
New retroactive BNPL feature lets users split past Cash App Card purchases into installments.
96% of BNPL installments were paid on time, and 98% of purchases had no late fees, showing user discipline.
Block, Inc. (XYZ - Free Report) is broadening its Buy Now, Pay Later (“BNPL”) offerings via Afterpay by integrating installment payment features directly into the Cash App. This allows qualified users to manage BNPL transactions seamlessly within the app. Additionally, Afterpay has enhanced its merchant ecosystem by partnering with retailers like StitchFix, PetMeds and Mejuri, expanding Block’s reach at checkout.
Block’s BNPL business continues to be a growing component of its Cash App and Square ecosystems. In the first quarter of 2025, BNPL helped drive 10% year-over-year gross profit growth for Cash App. Moreover, revenues generated from the BNPL platform were $312.9 million for the first quarter of 2025, up from $283.5 million reported in the year-ago period, indicating its growing contribution to Block’s financial services portfolio.
One of the key developments was the rollout of retroactive BNPL functionality for Cash App Card purchases, which was launched in February 2025. This feature allows customers to split past purchases into installments, offering added flexibility and control. Early results indicated strong adoption rates, reflecting user demand for more adaptive payment tools.
Additionally, the integration of Afterpay into Cash App in March exposed Block’s BNPL offerings to its full base of 57 million monthly active users. This move significantly broadened access and provided cross-platform synergies, enhancing customer engagement across payments, lending and commerce. Block reported that 96% of installments were paid on time, and 98% of purchases incurred no late fees, demonstrating the platform’s responsible user behavior.
From a strategic standpoint, BNPL aligns with Block’s goal of expanding access to banking and credit services, particularly for middle-income consumers. By embedding BNPL deeply into Cash App’s financial stack and scaling lending via in-house infrastructure, Block is positioned to grow responsibly and profitably. Overall, Block’s BNPL efforts reflect a disciplined expansion strategy, balancing user growth, healthy repayment behavior and monetization potential.
How Are PayPal and Affirm Growing in the BNPL Space?
PayPal (PYPL - Free Report) is expanding its BNPL business through strong user growth, improved checkout integration and global outreach. In the first quarter of 2025, BNPL volume rose more than 20%, and monthly active users grew 18%. Enhanced visibility in its modernized checkout, AI-driven personalization and targeted international campaigns are boosting adoption.
Affirm Holdings, Inc. (AFRM - Free Report) is expanding its BNPL business by strengthening long-term funding partnerships and diversifying capital sources. It extended its alliance with Moore Specialty Credit through 2027, securing continued support from a partner that has invested nearly $5 billion in its assets. Affirm also launched a $3 billion revolving loan facility with PGIM Fixed Income, enhancing funding flexibility, liquidity and scalability.
Block’s Price Performance, Valuation and Estimates
Shares of Block have declined 21.6% year to date, underperforming both the broader industry and the S&P 500 Index.
Image Source: Zacks Investment Research
Block shares are overvalued, as suggested by the Value Score of D. In terms of forward 12-month Price/Earnings (P/E), Block is trading at 22.57X compared with PayPal’s 13.74X.
Image Source: Zacks Investment Research
Estimates for Block’s EPS for 2025 have been southbound over the past 30 days. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Image: Bigstock
Could Block's BNPL Moves Reshape Its Financial Ecosystem?
Key Takeaways
Block, Inc. (XYZ - Free Report) is broadening its Buy Now, Pay Later (“BNPL”) offerings via Afterpay by integrating installment payment features directly into the Cash App. This allows qualified users to manage BNPL transactions seamlessly within the app. Additionally, Afterpay has enhanced its merchant ecosystem by partnering with retailers like StitchFix, PetMeds and Mejuri, expanding Block’s reach at checkout.
Block’s BNPL business continues to be a growing component of its Cash App and Square ecosystems. In the first quarter of 2025, BNPL helped drive 10% year-over-year gross profit growth for Cash App. Moreover, revenues generated from the BNPL platform were $312.9 million for the first quarter of 2025, up from $283.5 million reported in the year-ago period, indicating its growing contribution to Block’s financial services portfolio.
One of the key developments was the rollout of retroactive BNPL functionality for Cash App Card purchases, which was launched in February 2025. This feature allows customers to split past purchases into installments, offering added flexibility and control. Early results indicated strong adoption rates, reflecting user demand for more adaptive payment tools.
Additionally, the integration of Afterpay into Cash App in March exposed Block’s BNPL offerings to its full base of 57 million monthly active users. This move significantly broadened access and provided cross-platform synergies, enhancing customer engagement across payments, lending and commerce. Block reported that 96% of installments were paid on time, and 98% of purchases incurred no late fees, demonstrating the platform’s responsible user behavior.
From a strategic standpoint, BNPL aligns with Block’s goal of expanding access to banking and credit services, particularly for middle-income consumers. By embedding BNPL deeply into Cash App’s financial stack and scaling lending via in-house infrastructure, Block is positioned to grow responsibly and profitably. Overall, Block’s BNPL efforts reflect a disciplined expansion strategy, balancing user growth, healthy repayment behavior and monetization potential.
How Are PayPal and Affirm Growing in the BNPL Space?
PayPal (PYPL - Free Report) is expanding its BNPL business through strong user growth, improved checkout integration and global outreach. In the first quarter of 2025, BNPL volume rose more than 20%, and monthly active users grew 18%. Enhanced visibility in its modernized checkout, AI-driven personalization and targeted international campaigns are boosting adoption.
Affirm Holdings, Inc. (AFRM - Free Report) is expanding its BNPL business by strengthening long-term funding partnerships and diversifying capital sources. It extended its alliance with Moore Specialty Credit through 2027, securing continued support from a partner that has invested nearly $5 billion in its assets. Affirm also launched a $3 billion revolving loan facility with PGIM Fixed Income, enhancing funding flexibility, liquidity and scalability.
Block’s Price Performance, Valuation and Estimates
Shares of Block have declined 21.6% year to date, underperforming both the broader industry and the S&P 500 Index.
Image Source: Zacks Investment Research
Block shares are overvalued, as suggested by the Value Score of D. In terms of forward 12-month Price/Earnings (P/E), Block is trading at 22.57X compared with PayPal’s 13.74X.
Image Source: Zacks Investment Research
Estimates for Block’s EPS for 2025 have been southbound over the past 30 days. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Image Source: Zacks Investment Research
At present, Block carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.