Cash App, owned by Jack Dorsey’s Block, has launched a new pay-over-time feature. It lets eligible users split the cost of peer-to-peer transfers into payments. This follows the trend of financing small purchases, like DoorDash’s partnership with Klarna for food orders. To use it, users pay a 7.5% fee. Transfers of $25 or more can be repaid weekly over six weeks or as one payment. Loan limits vary per user based on individual assessment.
Block executive Owen Jennings says the feature aids cash flow for gig workers and others with variable income, unlike steady past wages. It follows other Cash App services like Borrow and Afterpay for its debit card. Jennings notes built-in protections to prevent debt spirals, as loans are non-revolving.
The growth of buy-now-pay-later services has drawn criticism for potentially trapping consumers in debt and reflecting economic stress, with some companies facing lawsuits over predatory practices.