As payments company Block’s peer-to-peer tool Cash App seeks to entice its users to use the mobile app for banking services, it may run into one surprising hurdle: Many consumers still want to go into a physical bank branch.
About 40% of surveyed consumers aged 18 to 34 said they do use, or would use, Cash App as their primary bank, making them the most likely age group to do so, according to a report last week by TD Cowen. By contrast, about 30% of consumers aged 35 to 54 and about 10% of consumers aged 55 years and older expressed the same openness to Cash App.
The report summarized findings of a bimonthly survey of 2,500 U.S. consumers conducted by TD Cowen in April, and included data from a survey conducted in February. The survey was designed to assess consumer awareness, behavior, preference and sentiment across payment methods.
Traditional banks, such as JPMorgan Chase and Wells Fargo, were the most popular primary banking option for consumers in the 18-to-34 age group, followed by fintech apps such as Cash App and Revolut, then neobanks such as Chime and SoFi, the report said. When asked why they were reluctant to switch to a neobank or fintech, about 45% of consumers in that age range said they wanted access to a physical branch.
Selling banking services to Cash App users is a “top strategic priority,” Block CFO Amrita Ahuja said during a recent earnings call in May.
Still, the TD Cowen report noted that consumers were increasingly using Cash App for services beyond P2P payments, including for banking services, direct deposit and shopping.
“Cash App punches above its weight” with consumers in the 18-to-24-year-old range, the report said.
Cash App competitor PayPal proved the most popular payment service, with about 70% of all consumers surveyed saying they had used the service, according to the report. PayPal led its own app, Venmo, along with Cash App in age groups older than 24, according to the report. Venmo was slightly ahead of Cash App when it came to lifetime users, the report said.
