Square, a payment platform for merchants and individual users operated by Twitter CEO Jack Dorsey, has surpassed Coinbase to become the most widely used iOS app to buy Bitcoin (BTC).
The platform, called Cash App on Apple’s iOS store, also overtook YouTube to become the number one top free mobile application on the iOS store, demonstrating a rising demand for digitalized payment systems in the U.S. market.
But how was Square able to overtake Coinbase and provide users the easiest way to purchase the dominant cryptocurrency?
On Square, which initially gained traction as a tool for merchants, individual users can instantly send and receive money using mobile phones without the need to go through inefficient bank wire transfers and traditional payment platforms.
Similar apps in South Korea and China like KakaoPay and AliPay have also become increasingly popular as alternatives to banks as the preferred payment systems of both businesses and individuals.
Prior to its integration of Bitcoin, Square was already being utilized as an online payments platform that is popular among millennials and new generation users that refrain from utilizing banking systems.
Square’s Bitcoin integration almost instantly appealed to its existing user and client base, as a large portion of the global population that is interested in cryptocurrencies has consistently been millennials throughout the past several years.
With the app, users can purchase Bitcoin efficiently because their bank accounts and credit cards are already connected to the application.
But, if a user is to trade on a regulated exchange like Coinbase or Gemini, the user would have to go to a bank and initiate a wire transfer to deposit a payment to the exchange, which then involves an inefficient process and risks of potential payment delays and technical issues.
Cryptocurrency exchanges also request new users to go through a rigorous and impractical Know Your Customer (KYC) verification period, demanding government-issued IDs such as a passport or a driving licenses, and in some cases, evidence of income or bank statement to increase the limit of the account.
It is easier for users to remain with an application they use on a regular basis on which they already have completed a KYC process like Square that do not require additional information.
In August, speaking to CNBC, Square CFO Sarah Friar stated that the company does not consider its Bitcoin trading service as a major monetization engine and does not intend to generate large profits out of it.
At least in the short-term, Friar said that the strategy of the company is to drive utility in the Cash App and increase the liquidity of the asset. She said:
“It’s not a major monetization engine. The goal is to continue to drive utility in the Cash App.”
Jack Dorsey, the CEO of Square, previously emphasized that Bitcoin means more to the company than simply a new area for revenue generation.
“Bitcoin, for us, is not stopping at buying and selling. We do believe that this is a transformational technology for our industry, and we want to learn as quickly as possible.”
Featured image from Shutterstock.
Last modified: May 20, 2020 2:09 PM UTC