Square, the merchant payment service provider known for its point of sale (POS) credit card readers and the peer-to-peer Cash App, has recently published its revenue report. Square’s Cash App allows people to digitally transact money much like PayPal, and also allows users to invest in the popular cryptocurrency.
In its third-quarter shareholder report, it stated $43 million in bitcoin revenue. Sounds quite a lot, but the report explains that after factoring out the cost of accepting the cryptocurrency, actual profits on the BTC revenues were roughly $500,000. Although, it’s about 20% more than the previous quarter, the start-up top brass says that for now, it is not going to rely on crypto.
The company’s spokesperson explained the reason behind big costs of offering bitcoin option. In order to accept bitcoin instantly at the POS, Square holds a certain amount of cryptocurrency on the customer’s behalf. But after Square bought the coins and before a customer makes a transaction, the BTC price can change and the company can lose money. And exactly starting this winter, the price of bitcoin kept falling lower and lower.
The payment company started supporting BTC in its Cash App in January this year. And despite the small revenue from BTC sales, start-up’s shares have surged more than 140% in the past year and 88% this year alone.
Earlier this year, Square registered a patent for a payment network that allows merchants to accept payments in any currency, including bitcoin or other cryptocurrency. The Square’s patented payment system, once implemented, could facilitate real-time transactions allowing a customer to pay in any currency of their choice, while the merchant can receive payment in a currency of their choice.
Despite such developments and Square CEO Jack Dorsey saying that he believes bitcoin could be the internet’s native currency within a decade and Square CFO Sarah Friar saying that the company has seen “real growth” in its bitcoin user base, the company officially holds that they are “not trying to push on the monetization of bitcoin today” and “it’s not a big monetization engine.”
Whatever the case is, the company’s Cash App has been installed over 10 million times on Google Play and all those customers are potential bitcoin traders. In this respect, Square is way ahead of PayPal, which have yet to integrate cryptocurrency in any way.
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