Buy now, pay later provider Block is going all in (once again) spruiking its Cash App, while going all in (once again) in obscuring the progress (or reversal of fortunes) of its Afterpay operation.
Seeking to stir capital market interest in its Cash App, on Friday Block leaned on minor uplifts in minimal measures over the last year to make its case as a (US-centric) disruptor climbing out of the market doghouse.
Annualised ‘Gross Payment Volumes’ in Cash App Pay were US$2.5 billion in the December 2023 quarter, Block said.
‘Gross Merchandise Value’ or GMV - a measure of the total order value processed on Block’s BNPL platform - was US$8.6 billion in the quarter.
These numbers represent essentially nothing relative to gross retail spending (or total card-based spending) in the United States and the nine other markets in which Block operates. In the US alone retail sales exceed US$1.2 trillion.
Transaction-based gross payment volume in FY2023 was US$228 billion for the full year of 2023, up 12 per cent year over year, largely reflecting growth in Square (a merchant acquiring business).
In the fourth quarter of 2023, Block began reporting the financial results of the BNPL platform fully within Cash App, rather than allocating 50 per cent of revenue and gross profit to each of Square and Cash App.
There has been no consistency and no clarity in Block’s financial reporting that would allow analysts to compare Afterpay’s financial performance under Block’s control with its past performance.
The dearth of data with an Australian angle in Block’s results reinforces cynicism that Afterpay is not merely past its prime in the local market, but may be in decline.
Among finance apps at Apple’s App Store, the Afterpay app does not even feature in the top 200. Zip, by contrast, ranks seventh.
One component of Block’s strategic communications since Friday will not be overlooked and will add to the doubts of the wary.
The Weekend AFR published a lengthy interview with Nick Molnar, one of the founders of Afterpay and now a senior executive with Block in the US (apparently his first interview in the two years since Block wildly overpaid for Afterpay).
The Australian Financial Review’s shameless boosterism for Afterpay and now Block will never be forgotten.
Afterpay, however, increasingly looks an afterthought in Australian finance and payments, and that may well be its fate in the US too.