Fintechs like Block and PayPal are battling like never before to be your all-in-one online bank
Jack Dorsey, co-founder of Twitter Inc., speaks during the Bitcoin 2021 conference in Miami, Florida, U.S., on Friday, June 4, 2021.
Eva Marie Uzcategui | Bloomberg | Getty Images
Jack Dorsey’s Block got started as Square, offering small businesses a simple way to accept payments via smartphone. Affirm began as an online lender, giving consumers more affordable credit options for retail purchases. PayPal upended finance more than 25 years ago by letting businesses accept online payments.
The three fintechs, which were each launched by tech luminaries in different eras of Silicon Valley history, are increasingly converging as they seek to become virtual all-in-one banks. In their latest earnings reports this month, their lofty ambitions became more clear than ever.
Block was the last of the three to report, and the high-level numbers were troubling. Earnings and revenue missed estimates, sending the stock down 18%, its steepest drop in five years. But to hear Dorsey discuss the results, Block is successfully implementing a strategy of offering consumers the ability to pay businesses by smartphone, send money to friends through Cash App, and access credit and debit services while also getting more ways to invest in bitcoin.
“In 2024, we expanded Square from a payments tool into a full commerce platform, enhanced Cash App’s financial services offerings, and restructured our organization,” Dorsey said on Block’s earnings call on Thursday after the bell.
Block and an expanding roster of fintech rivals have all come to see that their moats aren’t strong enough in their core markets to keep the competition away, and that the path to growth is through a diverse set of financial services traditionally offered by banks. They’re playing to an audience of digital-first consumers who either didn’t grow up using a brick-and-mortar bank or realized at an early age that they had no need to ever set foot in a physical branch, or to meet with a loan officer or customer service rep.
“Longer term, we see a significant opportunity to grow actives, particularly among that digital-native audience like Millennial and Gen Z,” Block CFO Amrita Ahuja said on the earnings call.
As part of its expansion, Block has encroached on Affirm’s turf, with an increasing focus on buy now, pay later (BNPL) offerings that it picked up in its $29 billion purchase of Afterpay, which closed in early 2022. Block’s market share in BNPL increased by one point to 19%, while Affirm held its position at 17%, according to a recent report from Mizuho. Both companies are outperforming Klarna in BNPL, the report said.
Block’s BNPL play is now tied into Cash App, with an integration activated this week that gives users another way to make purchases through a single app. With Cash App monthly active users stagnating at 57 million for the last few quarters, the company is focused on engagement rather than rapid user acquisition.
“We think that there is significant opportunity for growth longer term, but there are some deliberate decisions we’ve made as part of our banker-based strategy in the near term” that have kept user numbers from increasing, Ahuja said. “This is a part of our continuous enhancements to drive healthy customer engagement as we bank our base.”
Compared to Block, Wall Street had a very different reaction to Affirm’s earnings earlier this month, pushing the stock up 22% after the company’s results sailed past estimates.
Affirm founder and CEO Max Levchin, who was previously a co-founder of PayPal, built his company with the promise of giving consumers lower-cost and easy-to-tap intstallment loans for purchases like electronics, jewelry and travel.
The BNPL battlefront
In its latest earnings report, Affirm posted a 35% increase in gross merchandise volume to $10.1 billion. Revenue surged 47% to $770 million, while its active consumer base grew 23% to 21 million.
Beyond BNPL, Levchin has pushed Affirm into debit with the Affirm Card, which now has 1.7 million active users, up 136% year-over-year.
“Anything we can do to personalize the experience, to give people a chance to feel like this is the best alternative they have to their debit or their credit card is what we’re busy with,” Levchin said on the earnings call. He said the goal is to get the card to 20 million users, spending on average $7,500 per year.
Affirm is also partnering with FIS to bring its debit card functionality to traditional banks.
Levchin left PayPal in 2002, after the company was acquired by eBay. It was a decade before he’d start working to help popularize the modern day BNPL market.
Now his former employer, which spun back out from eBay in 2015, is in on the BNPL game.
Under the leadership of CEO Alex Chriss, who took over the company in September 2023, PayPal is in the midst of a turnaround that involves working to better monetize products like Braintree and Venmo and joining the world of physical commerce with a debit card inside its mobile app.
Investors responded positively in 2024, pushing the stock up almost 40% after a brutal few years. But the stock dropped 13% after its earnings report, even as profit and revenue were better than expected. PayPal’s total payment volume for the quarter hit $437.8 billion, slightly below projections, while transaction margins rose to 47% from 45.8% — a sign of improving profitability.
One of Chriss’ big pushes is to get more out of Venmo, which has long been a popular way for friends to pay each other but hasn’t been a big hit with businesses. Venmo’s total payment volume in the quarter rose 10% year-over-year, with increased adoption at DoorDash, Starbucks, and Ticketmaster.
PayPal is also promoting Venmo’s debit card and “Pay With Venmo,” which saw 30% and 20% monthly active growth in 2024, respectively. The company is introducing new services to improve merchant retention, including its Fastlane one-click checkout feature, designed to compete with Apple Pay and Shopify’s Shop Pay.
Last year, the company launched PayPal Everywhere, a cashback-driven initiative designed to boost engagement within its mobile app. Chriss said on the earnings call that it’s “driving significant increases in debit card adoption and opening new categories of spend.”
As with virtually all financial services products, the new offerings from Block, Affirm and PayPal are designed to produce growth but not at the expense of profit. Banks operate at low margins, in large part because there’s so much competition for lower-priced loans and better cash-back options. There’s also all the costs associated with underwriting and compliance.
That’s the environment in which fintechs have to operate, though without the costs of running a network of physical branches.
Levchin talks about helping customers spend less, not more. And Block acknowledges the need for hefty investments to reach the company’s desired outcome.
“This is a part of our continuous enhancements to drive healthy customer engagement as we bank our base,” Ahuja said. “We’ve made investments in critical areas like compliance, support and risk. And as we’ve done that, we’ve progressed more of our actives through our identity verification process, which in turn, unlocks greater access to those actives to our full suite of financial tools.”
Credit where credit is due: in a massive, 32-car multinational independent test, Tesla’s Autopilot ADAS came out on top, the new affordable Tesla turns out to be a corner-cutting Model Y, and one of the company’s original founders compares the Cybertruck to a dumpster. All this and more on today’s episode of Quick Charge!
Today’s episode is brought to you by Retrospec – the makers of sleek, powerful e-bikes and outdoor gear built for everyday adventure! To that end, we’ve got a pair of Retrospec e-bike reviews followed up by a super cute, super affordable new EV from China with nearly 150 miles of range for less than $5,000 USD.
PLUS: listeners can get an extra 10% off by using code ELECTREK10 at retrospec.com!
Source Links
Prefer listening to your podcasts? Audio-only versions of Quick Charge are now available on Apple Podcasts, Spotify, TuneIn, and our RSS feed for Overcast and other podcast players.
New episodes of Quick Charge are recorded, usually, Monday through Thursday (most weeks, anyway). We’ll be posting bonus audio content from time to time as well, so be sure to follow and subscribe so you don’t miss a minute of Electrek’s high-voltage daily news.
Got news? Let us know!
Drop us a line at tips@electrek.co. You can also rate us on Apple Podcasts and Spotify, or recommend us in Overcast to help more people discover the show.
If you’re considering going solar, it’s always a good idea to get quotes from a few installers. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here.
FTC: We use income earning auto affiliate links. More.
Tesla is again teasing the new Roadster, which is now five years late, as “the last driver’s car” before self-driving takes over.
The chicken or the egg. Is Tesla delaying the Roadster to match the development of self-driving technology, or is it delaying the development of self-driving technology to match the delayed release of the Roadster?
The prototype for the next-generation Tesla Roadster was first unveiled in 2017, and it was initially scheduled to enter production in 2020; however, it has been delayed every year since then.
It was supposed to achieve a range of 620 miles (1,000 km) and accelerate from 0 to 60 mph in 1.9 seconds.
It has become a sort of running joke, and there are doubts that it will ever come to market despite Tesla’s promise of dozens of free new Roadsters to Tesla owners who participated in its referral program years ago.
Tesla used the promise of free Roadsters to help generate billions of dollars worth of sales, which Tesla owners delivered; however, the automaker never delivered on its part of the agreement.
Furthermore, many people placed deposits ranging from $50,000 to $250,000 to reserve the vehicle, which was initially scheduled to hit the market five years ago.
When unveiling the vehicle, CEO Elon Musk described it as a “halo car” that would deliver a “smack down” to gasoline vehicles.
That was almost eight years ago, and many electric hypercars have since launched and delivered this smackdown.
Tesla has partly blamed the delays on improving the next-gen Roadsters and added features like the “SpaceX package,” which is supposed to include cold air thrusters to enable the vehicle to fly – Musk has hinted.
Many people don’t believe any of it, as Tesla has said that it would launch the new Roadster every year for the last 5 years and never did.
Now, Lars Moravy, Tesla’s head of vehicle engineering, made a rare new comment about the next-generation Roadster during an interview at the X Takeover event, an annual gathering of Elon Musk cultists, last weekend.
He referred to Tesla’s next-gen Roadster as the “last best driver’s car” and said that the automaker did “some cool demos” for Musk last week:
We spent a lot of time in the last few years rethinking what we did, and why we did it, and what would make an awesome and exciting last best driver’s car. We’ve been making it better and better, and it is even a little bit more than a car. We showed Elon some cool demos last week and tech we’ve been working on, and he got a little excited.
The timing matches Musk’s recent claim that Tesla is going to have ‘the most epic demo ever, ’ but we heard that one before.
We suspected that the comment might be about the Tesla Roadster, as the CEO made the exact same comment about Roadster demos in 2019 and 2024. You will not be shocked to hear that these demos never happen.
Electrek’s Take
The “last best driver’s car” before computers are going to drive us everywhere. It’s a self-fulfilling prophecy if you continue to delay the car. It might literally be the last car ever made that way. How would we ever know?
The truth is that the Roadster was cool when it was unveiled in 2017, but that was a long time ago. Tesla would need to update the car quite a bit to make it cool in 2025, and I don’t know that cold air clusters are it. You will have extreme limitations using those.
The Roadster is almost entirely in the “put up or shut up” category for me at Tesla. They need to stop talking about it and make it happen; otherwise, I can’t believe a word.
FTC: We use income earning auto affiliate links. More.
The PV5 is already available in several markets, but will Kia launch it in the US? After Kia’s electric van was spotted testing in the US again, a US debut could be in the works.
Is Kia’s electric van coming to the US?
Kia launched the PV5, the first dedicated electric van from its new Platform Beyond vehicle (PBV) business, in South Korea and Europe earlier this year, promising it will roll out in “other global markets” in 2026.
Will that include the US? Earlier this year, Kia’s electric van was caught charging at a station in Indiana. Photos and a video sent to Electrek by Alex Nguyen confirmed it was, in fact, the PV5.
Kia has yet to say if it will sell the PV5 in the US, likely due to the Trump Administration’s new auto tariffs. All electric vans, or PBVs, including the PV5, will be built at Kia’s Hwaseong plant in South Korea, which means they will face a stiff 25% tariff as imports.
Following another sighting, a US debut cannot be ruled out. The PV5 Passenger model was spotted by Automotive Validation Engineer Chris Higa (@Chrisediting) while testing in Arizona.
There’s no denying that’s Kia’s electric van, but it doesn’t necessarily confirm it will launch in the US. But it could make sense.
Despite record first-half sales in the US, Kia’s EV sales have fallen significantly. Sales of the EV9 and EV6 are nearly 50% less than in the first half of 2024.
To be fair, part of it is due to the new model year changeover, but Kia is also doubling down on the US market by boosting local production. Earlier this year, Kia said the EV6 and EV9 are now in full-scale production at its West Point, GA, facility.
The PV5 Passenger (shown above) is available in Europe with two battery pack options: 51.5 kWh or 71.2 kWh, rated with WLTP ranges of 179 miles and 249 miles, respectively. The Cargo variant has the same battery options but offers a WLTP range of either 181 miles or 247 miles.
During its PV5 Tech Day event last week, Kia revealed plans for seven PV5 body types, including an Open Bed (similar to a pickup), a Light Camper, and even a luxury “Prime” passenger model.
Kia is set to begin deliveries of the PV5 Passenger and Cargo Long variants in South Korea next month, followed by Europe and other global markets, starting in Q4 2025. As for a US launch, we will have to wait for the official word from Kia.
Do you want Kia to bring its electric van to the US? Drop us a comment below and let us know your thoughts.
Source: Chris Higa, TheKoreanCarBlog
FTC: We use income earning auto affiliate links. More.
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports1 year agoStory injured on diving stop, exits Red Sox game
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Sports2 years agoButton battles heat exhaustion in NASCAR debut
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike