There’s a new big dog in the iOS app store for cryptocurrency purchasing. Square surpasses Coinbase in terms of app most widely used to buy Bitcoin. Square, operated by Twitter CEO Jack Dorsey, has managed to usurp Coinbase! Do you think this is good?
The platform, specifically called Cash App on Apple’s iOS store, also overtook YouTube to become the #1 top free mobile application on the App Store. This indicates a rising demand for digitalized payment systems in the US Market.
The big question now is: How did Square overtake Coinbase and provide users an easier way to purchase cryptocurrency?
It’s About Access
Square, which initially gained a loyal following from merchants, allows individuals to instantly send and receive money via their mobile phones. This method bypasses inefficient bank wire transfers, ACH transfers, and traditional payment platforms.
Apps like Square already exist and thrive, particularly in Asia. Apps like KakaoPay and AliPay, South Korean and Chinese respectively, have become very popular as a method of payment remittance in lieu of traditional financial institutions and banks.
Square was already popular with millennials and new generation users as a form of payment remittance that refrain from using traditional banking systems – now that its added Bitcoin integration, Square has become more and more popular.
Square’s Bitcoin integration appealed to its existing user and client base, and acted as a draw for a large portion of the global population that is interested in cryptocurrencies and Bitcoin. That target demographic? Millennials.
With the app, users can purchase Bitcoin efficiently and seamlessly since their bank account information and credit cards are already integrated with the app.
But try buying cryptocurrency on a regulated exchange like Coinbase or Gemini – the user has to go to the bank to initiate a wire transfer to deposit their fiat onto the exchange. That process can take a couple business days – be delayed – or stopped entirely due to an inefficient process and technical issues.
Exchanges also request new users to go through vigorous KYC (Know your customer) verification. That period in of itself can be limiting due to KYC verification processes – oftentimes demanding government documents, income statements, and or banking statements to increase purchasing limits.
With Square, an individual has already gone through KYC if they’ve been using the app for payment remittance and processing. It’s one less step that has to be done to purchase Bitcoin – a marketable improvement from the perspective of Square vs Coinbase.
What About Profits?
Sarah Friar, Square’s CFO, spoke to CNBC in August regarding profits in its cryptocurrency services. In that interview, she clarified that the company does not consider cryptocurrency services to be a major monetization engine and does not plan on generating large profits from it. In the short term, the strategy is to drive utility and fill a niche need for those who see a need for an app like 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 has emphasized that Bitcoin means more to the company than simply another source of revenue. “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.”
What do you think? We keep seeing really good news for the market. We know the markets are depressed, but the news indicates that cryptocurrency is here to stay. Financial Institutions know it. Retail investors know it. Governments know it. Businesses know it. Do you? Let us know what you think on our Facebook Page!
