It is the first time that BTC revenue has exceeded fiat revenue at the online payments company. For the three months to March 31, 2020, Cash App fiat revenue amounted to $222 million, bringing total sectoral revenue to $528 million.
Square’s Cash App reported Wednesday, that bitcoin (BTC) revenue during the first quarter of the year, soared 367% to $306 million from $65 million a year ago. Quarter-on-quarter, the figure is up 71%.
The increase is thanks “to growth in the number of active bitcoin customers, as well as growth in customer demand as a result of the decrease in the price of BTC”, Square said.
At $7 million, bitcoin-related profit accounted for just 3.8% of Cash App gross profit of $183 million. That compares with $8 million earned for the whole of 2019.
Square said total revenue for the three months climbed 44% to $1.38 billion from a year earlier. Net quarterly loss expanded to $106 million from $38 million last year.
The company reported a net income of $391 million in the fourth quarter of 2019, helped by a $373 million gain from the sale of subsidiary Caviar.
Covid-19 helped to drive online transactions. In April, said Square, as Cash App recorded its “highest monthly totals for net-new transacting active customers, peer-to-peer volumes …direct deposit transacting active customers and bitcoin volumes…” Direct deposits, for example, grew 3x compared to March.
Going forward, Square indicated that it will focus on customer acquisition and product velocity for it’s Cash App. According to the earnings report:
We see significant opportunity to invest in acquiring new customers, driven by peer-to-peer payments as well as creative marketing strategies. We intend to continue to identify opportunities to launch new products and expand the ways that Cash App can help customers manage their money.
Cash App allows users to transfer funds between the U.S. and U.K. with no fees, as well as to buy bitcoin.
At the time of writing, shares of Square are up 6.15% at $72.39 in morning trade at the New York Stock Exchange. Over the past 52 weeks, the stock has reached a high of $87.25 and a low of $32.33.
Standard Chartered Invests More Money in Newly Rebranded Trade Finance Startup
Standard Chartered has invested an undisclosed sum into Contour, a Corda-based blockchain trade platform, to streamline transaction settlement processes.
Contour, which rebranded from Voltron last week, recently tapped R3’s Asia chief Carl Wegner as CEO in the run-up to a full commercial launch of its digitized letter-of-credit (LoC) service, which it claims reduced processing time for LoCs from two weeks to just under a day in multiple pilot projects. Standard Chartered Global Head of Transaction Banking Lisa Robins said Tuesday the company streamlined the trade process by cutting down on the amount of paper needed.
Letters of credit are a bank-backed payment guarantee – transferable proof the seller will get the money owed. They are an integral part of cross-border commerce and yet, according to Contour, LoCs can take up to 10 days to process and settle.
Contour has financial backing from Bain and Co., Bangkok Bank, BNP Paribas, HSBC, ING, SEB, R3, CryptoBLK and CTBC Venture Capital. Many of those current partners were part of Contour’s LoC trials under the network’s previous name.
“The opportunity cost in trade finance is huge”, Carl Wegner said in a recent company blog post. “Trillions of dollars in commodities, products and services are transacted daily, but the sector is still characterized by slow, duplicative and expensive processes. Contour delivers a network where trusted information is shared in real time, effectively digitizing letters of credit across all users in the transaction.”
Institutional clients seemed to agree. In May 2019, 96 percent of participants in an R3-run trade trial of 50 banks and firms indicated Voltron could improve their finance processing.
The newly branded company will seek to capitalize on that sentiment later this year. According to Wegner, the company is “now focusing on scaling the network with more banks, corporates and partners, and look forward to continuing to collaborate with our growing community.”
GTR reported Contour will launch a commercial version of the product in the second half of 2020 and plans to build out its technical staff in the interim.