How Does Square Make Money? Square and Block Business Model (2026)

How we source: figures on this page come from the company’s own filings (SEC 10-K, 10-Q and earnings releases, or its annual report), with the period stated next to each number. Last refreshed October 2026. Our methodology.

What drives Block’s revenue

Block reports three revenue lines. Commerce enablement (Square payments, software and hardware, Cash App Card, Cash App Pay, buy-now-pay-later and TIDAL) brought in $11.5B in FY2025, up 10%. Financial solutions (Cash App Borrow, Instant Deposit, ATM fees, interest and Square Loans) brought in $4.2B, up 28%. Bitcoin ecosystem revenue was $8.5B, down 18%.

The bitcoin figure overstates what bitcoin earns. Block records the full sale price of bitcoin it sells to Cash App customers as revenue and its purchase cost as cost of revenue. The filing says bitcoin was 35% of FY2025 revenue but only 4% of gross profit. For that reason Block’s management judges both segments on revenue and gross profit.

How Block compares

Cash App is now the bigger profit engine. Its gross profit rose 21% to $6.3B in FY2025, about 61% of the group total. Square’s rose 9% to $3.9B, about 38%. Cash App’s segment revenue fell 5% to $15.4B because bitcoin sales dropped; excluding bitcoin, it rose 20%.

Against its own history, revenue has grown from $17.7B in FY2021 to $24.2B in FY2025, but it barely moved in the last year ($24.12B to $24.19B). The growth came in gross profit, which rose from $8.9B to $10.4B.

What changed in FY2025

Block dropped its old revenue categories (transaction-based, subscription and services, hardware, bitcoin) and recast prior years into its three new lines. Operating income almost doubled to $1.7B from $0.9B. Net income fell to $1.3B from $2.9B because FY2024 included a one-off tax benefit of $1.9B.

Lending grew fast, and so did its costs. Loan losses rose 154% to $820.8M as Cash App Borrow volumes grew 143%. From the second quarter, some Borrow loans were kept on Block’s balance sheet and also made through its own bank, Square Financial Services.

What to watch

In February 2026 Block announced plans to cut its workforce by more than 40%, with expected charges of $450M to $500M, mostly in the first quarter of 2026. Block says it plans to keep operating at this smaller size, using AI automation among other measures.

The filing lists loan repayment, the crypto market and bank regulation among its main risks. Each one bears directly on the products that drove FY2025 growth: Borrow, Square Loans and the bitcoin business.

Frequently asked questions

How does Block make money?

Mainly from fees. Square charges sellers a percentage of each payment, and Cash App earns interchange on card spending plus fees on Borrow loans, instant deposits and ATM withdrawals. In FY2025, commerce enablement revenue was $11.5B and financial solutions revenue was $4.2B.

Which makes more money, Cash App or Square?

Cash App. In FY2025 Cash App produced $6.3B of gross profit, up 21%, and Square produced $3.9B, up 9%, out of a group total of $10.4B.

Why is bitcoin such a large share of Block's revenue?

Block records the full sale price of bitcoin sold to Cash App customers as revenue. Bitcoin was 35% of FY2025 revenue ($8.5B) but, according to the filing, only 4% of gross profit.

How many people use Cash App?

Block reported 59 million monthly transacting actives as of December 2025, up from 57 million in December 2024. They brought $316B of inflows into Cash App in 2025.

Square is a merchant service company providing sellers with hardware and software tools to run their businesses. The company’s CashApp enables money transfers and investments in stocks, ETFs and Bitcoins. The company makes money based on transactions via its payment products and through subscription services. Square also makes money via its Cash App.

Origin story

Square is an American financial and merchant services company based in San Francisco, California.

The company was founded in 2009 by Jack Dorsey and Jim McKelvey. The idea for Square came after McKelvey – a seller of glass bathroom fittings – could not finalize a $2,000 sale because of his inability to accept credit cards as a form of payment.

From a small office in St. Louis, the company was then named Square after its signature square-shaped card readers.

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Square value model

Mission and Vision

Square’s vision is to enable “everyone to participate and thrive in the economy.”

And the mission is to let “no one to be left out of the economy because the cost is too great or the technology too complex.”

As Square further explains:

So we’re building easy tools to empower and enrich people. Tools that shorten the distance between having an idea and making a living from it—because we believe in fair and square.

Which articulates in:

We’re here to help sellers of all sizes start, run, and grow their business—and helping them grow their business is good business for everyone.

Value Proposition

As the company explains:

Square was established to give every aspiring business owner an easier way to take credit cards. We’ve built a lot more tools since. From side gigs to sports stadiums, we’re helping power businesses of all sizes and types to help them succeed—no matter what success means to them.

As a payment platform the value proposition is articulated around two main players:

• Sellers: who adopt the tools created by Square to run their businesses.
• Developers: who instead build, deploy, maintain and grow part of the tools provided via Square.

Therefore, the value proposition is articulated around those two key players.

Value Proposition for Sellers

• A set of tools to enable commerce: from managing payments to PoS, payroll, invoices, and promotion.
• No-lock-in: third-party tools are easily integrated within the Square ecosystem.
• A simple and compelling set of tools: the Square platform is also relatively simple for sellers to set up, run, and its payment tools are also well integrated within the seller’s premises.

Value Proposition for Developers

As with any development community, the more those developers are given the opportunity to build products that can be monetized for a large audience, the more it will be easier to keep the community alive.

Therefore, developing tools for the Square App Marketplace is indeed interesting for developers because they can:

• Acquire new customers by building up tools for the marketplace.
• Keep all the revenues from the app’s sales (the seller retains 100% of the revenues generated via the Square marketplace).

Cash App Value Proposition

Another key value to take into account is related to the Square Cash App, which enables users to transact, invest and deposit Bitcoin through the platform.

While the Cash App integrates also within Square’s seller and developer ecosystem, in part, that has a life of its own.

Indeed, some of the value propositions intrinsic to the Cash App are:

• Easily send over the money.
• Easily invest in Bitcoin and other assets.

Square technological model

Square’s technological model moves along its two main core products/ecosystems:

• The sellers/developers ecosystem makes up the tools, apps, and services provided for sellers.
• And the Cash App ecosystem is made of customers looking to transfer money, and invest in Bitcoin and stocks.

Value Proposition for Developers

Image Source: Square Investor Relations – Q3 2020

Image Source: developer.squareup.com

Therefore, developing tools for the Square App Marketplace is indeed interesting for developers because they can:

• Acquire new customers by building up tools for the marketplace.
• Keep all the revenues from the app’s sales (the seller retains 100% of the revenues generated via the Square marketplace).

Cash App Value Proposition

Another key value to take into account is related to the Square Cash App, which enables users to transact, invest and deposit Bitcoin through the platform.

Indeed, some of the value propositions intrinsic to the Cash App are:

• Easily send over the money.
• Easily invest in Bitcoin and other assets.

Value Propositions:

• Payment Processing Simplified: Square offers seamless payment processing solutions that allow merchants to accept credit card payments, debit card transactions, and mobile payments quickly and securely. With user-friendly hardware and software options, Square enables businesses to streamline their checkout process and offer convenient payment methods to customers, enhancing the overall shopping experience.
• Business Management Tools: Square provides a range of business management tools and services, including point-of-sale systems, inventory management software, employee management solutions, and customer relationship management (CRM) tools. By centralizing key business functions and data, Square helps merchants optimize operations, track sales performance, manage inventory levels, and build customer relationships more effectively.
• Accessible Financial Services: Square offers accessible financial services to individuals and businesses, including small business loans, merchant cash advances, and business banking solutions. By providing flexible financing options and banking services tailored to the needs of entrepreneurs and small businesses, Square empowers users to access capital, manage cash flow, and grow their businesses with confidence.
• Integrated Ecosystem: Square offers an integrated ecosystem of hardware and software products that seamlessly work together to meet the diverse needs of merchants. From point-of-sale terminals and card readers to invoicing tools and online payment gateways, Square provides a comprehensive suite of solutions designed to simplify payment acceptance, optimize business operations, and drive growth for businesses of all sizes.
• Data-driven Insights: Square offers robust analytics and reporting tools that provide merchants with valuable insights into their sales performance, customer behavior, and business trends. By leveraging data-driven insights, merchants can make informed decisions, identify growth opportunities, and optimize their strategies for success, driving efficiency and profitability in their operations.

Square technological model

Image Source: Square Investor Relations – Q3 2020

Square’s technological model moves along its two main core products/ecosystems:

• The sellers/developers ecosystem makes up the tools, apps, and services provided for sellers.
• And the Cash App ecosystem is made of customers looking to transfer money, and invest in Bitcoin and stocks.

Technology for sellers

Image Source: Square Investor Relations – Q3 2020

Square provides a suite of cloud-based software solutions to help sellers operate, run and manage their businesses.

The whole software architecture is designed with a simple-to-use interface — as explored in the interface layer wars reshaping consumer tech — , which is mostly self-serving.

Employees within seller organizations can quickly learn how to use the Square interface for managing transactions and much more.

The suite of tools comprises the Online, Point of Sale, Developer Platform, Customer Relationship Management, and Team Management products.

Therefore, the products can be broken down into:

Point of Sales Solutions

A set of tools enabling digital receipts, payments, tracks sales, inventory, customers’ purchase histories, and more.

These products are monetized either via a subscription fee or on a transaction basis:

• Square Point of Sale: a general-purpose point-of-sale.
• Square Appointments include support for booking, retail sales, invoicing, and payments.
• Square for Retail includes barcode scanning, advanced inventory management, support for thousands of items, cost of goods sold reporting, purchase orders, and vendor management.
• Square for Restaurants is primarily a more advanced version of the service specifically thought for the food and beverage industry. This includes table, order, and course management.

Products to facilitate sales online and via social media

A suite of tools to make it easy for sellers to business online (and via social media).

• Square Online is a tool making it easy to build a website and online store and to sell on Instagram and Facebook.
• Square Online Checkout enables businesses to sell online without a website by creating a checkout link.
• Square Invoice is a digital invoicing solution with secure online payment acceptance.
• Square Virtual Terminal enables sellers to use a computer as a card terminal.

Business and customer relationship management products

This set of tools enables sellers digital tools to streamline their operations:

• Square Team Management to schedule staff, view team performance and sales analytics in real-time and used Square Payroll to pay employees.
• Square Contracts provides template-based digital contracts with e-signature support for uses.
• Square Loyalty, Marketing, Gift Cards, and Feedback enable sellers to engage with their buyers in-store and online.
• Square Dashboard provides real-time data and insights about orders, items, inventory, customers, employees, payments, marketing, and loyalty performance.

Hardware/physical products for the shop

Image Source: squareup.com

Square provides a set of hardware products, custom-designed allowing sellers to accept cards by Visa, MasterCard, American Express, Discover, JCB, Interac Flash (in Canada), e-Money (in Japan), and eftpos (in Australia).

Some of the hardware products Square offers comprise:

• Magstripe reader for swiped transactions of magnetic stripe cards.
• Square Stand transforming an iPad into a payment terminal or full point of sale solution.
• Square Register is an all-in-one combining hardware, point-of-sale software, and payments technology.
• Square Terminal is a portable, all-in-one payments device and receipt printer.

Financial services for sellers

When it comes to payments Square acts as both the merchant of record for the transaction as well as the payment service provider offering the following services:

• Managed Payments comprising next-day settlements, payment dispute management, data security, and PCI (payment card industry) compliance.
• Risk Manager provides insight into online payment fraud patterns and enables them to set custom rules and alerts to manage risk.
• Square Card is a free business prepaid debit card that provides a way for sellers to spend and manage their funds, enabling sellers to spend their proceeds as soon as they make a sale.
• Square Capital makes it easy to loan to qualified Square sellers.
• Square Payroll facilitates sellers in hiring and onboarding employees pay wages and associated employee taxes and offers employee benefits.

Technology for Developers – Developers Platform

The developer’s community is a key part of the success of Square business model.

The developer platform consists of two main parts: APIs and development kits. These empower developers in easily building tools on top of the Square ecosystem and marketplace.

These comprise:

• Payment APIs support in-person, online, and mobile payments. Square Reader SDK for developers to customize checkout experiences for sellers (e.g. self-ordering kiosks powered by Square).
• Commerce APIs with more than 30 commerce APIs, to create and manage orders, subscriptions, product catalogs, inventory, and more, so that developers can build applications for the Square marketplace.

Technology for Investors

Image Source: Cash App – Apple Store

With Cash App, individuals/retail investors can manage their money either by:

• Storing, Sending, and Receiving Funds: individuals can receive money from another Cash App customer. Or they can send funds, or keep them in storage via the app.
• Spending Cash Card which consists of a debit card linked directly to a customer’s Cash App balance.
• Investing retail investors can use the app to invest in US-listed stocks, exchange-traded funds, or bitcoin.

Square distribution model

Image Source: Square Investor Relations – Q3 2020

Some of the go-to-market and distribution/marketing strategies comprise:

• Brand affinity: over the years Square has built a strong brand, over a claimed superior service with a 63 Net Promoter Score, which as the company explains is much higher compared to traditional payment services.
• Direct marketing: especially in the form of email marketing, in-product notifications, and messaging
• Online search engine optimization and marketing.
• Online display advertising.
• Mobile advertising.
• Affiliate and referrals.
• Public relations.
• Direct sales, where sales teams contribute to the acquisition and support of larger sellers.
• Partnerships through the Square App Marketplace.
• Customer support helps to increase awareness and usage of our products.

For the Cash App other marketing strategies like:

• Peer-to-peer (P2P) transactions as the primary acquisition channel for Cash App.
• Cash App also leverages paid marketing, referrals, advertising spend, partnerships, and social media campaigns.

Square revenue model

Source: Square Inc. Financial Statements 2020

As the company highlights the seller ecosystem is composed of “30 distinct software, hardware, and financial services products” monetized through a combination of transaction, subscription, and service fees.

Since 2019 the company has also made a substantial chunk of its money via the Cash App Bitcoin investing activities, which in fiscal 2025 (twelve months ended 31 December 2025) produced bitcoin ecosystem revenue of $8,502,787 thousand, out of Block's total net revenue of $24,193,683 thousand.

Seller ecosystem revenue model

On the seller revenue model, Square uses a sort of razor and blade strategy. In this case, the razor is the hardware sold mostly at cost or even a loss, while the company generates revenues at much higher margins on the transaction and subscription services side.

• Transaction-based revenues: here Square charges its sellers a transaction fee for managed payments solutions, in most cases as a percentage of the total transaction.
• Subscription and services-based revenues: this comprises the revenues from Cash App, Square Capital, and Instant Transfers.
• Hardware revenues include revenues from sales of contactless and chip readers, Square Stand, Square Register, Square Terminal, and third-party peripherals.

Cash App revenue model

Business charges

Whenever a business accepts a Cash App payment, Square charges a 2.75% fee. This occurs in one of two ways:

• When an individual makes an in-app P2P payment to a business.
• When an individual uses the Square Cash Card to make a payment to a business. The Cash Card is a prepaid Visa debit card linked to each user’s account.

Expedited transfer and credit card payments

Consumers can expedite fund transfers from the Cash App account to a nominated bank account for a 1.5% fee.

This enables the consumer to have the funds land in their account immediately and not after the standard two or three days.

Personal payments can also be made via a linked credit card. For this service, Square charges a 3% transaction fee.

Bitcoin exchange

In late 2017, Square added bitcoin functionality to Cash App accounts. This enabled users to buy and sell bitcoin using the funds in their accounts. For approximately two years, this service was free.

Then, in 2019, Square began charging fees as high as 1.76% for every purchase of bitcoin. Cryptocurrency has now become so popular that the service is one of Square’s most profitable revenue streams.

The company also charges a premium for facilitating the exchange – mostly between 1 and 4%.

For example, Square may purchase $5,000 worth of Bitcoin from one customer and then sell the same amount to another customer for $5,200.

Generally speaking, the precise fee varies according to fluctuations in bitcoin value.

Marketing Strategy:

• Online Advertising: Square invests in online advertising channels, including search engine marketing (SEM), display advertising, and social media advertising, to increase brand awareness, drive website traffic, and attract new merchants to its platform. By targeting relevant keywords, demographics, and audience segments, Square reaches potential customers actively searching for payment processing solutions and business management tools online.
• Content Marketing: Square engages in content marketing initiatives to educate, inform, and inspire merchants about the benefits of its products and services. Through blog posts, articles, case studies, and video content, Square provides valuable insights, tips, and best practices for running a successful business, showcasing real-life success stories and customer testimonials to demonstrate the value of its solutions.
• Email Marketing: Square utilizes email marketing campaigns and newsletters to nurture leads, onboard new merchants, and engage existing customers. By sending targeted emails with product updates, feature announcements, and promotional offers, Square keeps merchants informed, engaged, and connected, driving user retention, cross-selling, and upselling opportunities through email communication.
• Affiliate Partnerships: Square operates an affiliate program that incentivizes affiliates, influencers, and partners to promote its products and services to their respective audiences. Affiliates earn commissions or rewards for referring new merchants to Square or driving successful conversions through affiliate links, banners, and promotional content, expanding Square’s reach and driving user acquisition through affiliate marketing channels.
• Referral Programs: Square offers referral programs that incentivize existing merchants to refer new businesses to its platform in exchange for rewards, discounts, or account credits. By leveraging word-of-mouth referrals and incentivizing customer advocacy, Square encourages merchants to spread awareness and generate leads, fueling organic growth and user acquisition through referral marketing initiatives.

Business Model Highlights

• The Square business model is developed around two business ecosystems (seller/developer ecosystem and Cash App Ecosystem).
• Square is an American financial and merchant services company. The company’s idea was born after founder Jim McKelvey could not accept a credit card as payment for a $2,000 piece of tapware.
• Square drives most of its revenue through its P2P Cash App service. For consumers, transferring funds using the basic version of the app is free. For businesses, Square charges a flat 2.75% fee for every eligible transaction.
• Square makes money by charging consumers 1.5% for expedited fund transfers. The company has also seen significant growth in its bitcoin exchange service. For a 1-4% fee, Square customers can buy and sell bitcoin using account funds.
• On the seller revenues side, Square follows a razor and blade strategy where the hardware is sold at cost or loss, while the company makes money based on transaction revenues and all the other services developed on top of it.
• Square leverages a set of marketing and distribution strategies, moving along a strong brand built over the years and direct and online marketing channels.

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