In the past decade, there has been a ton of innovation in the payments industry. One of the businesses leading the charge is Block (XYZ 7.42%). The Jack Dorsey-led company has become popular among consumers and small merchants, propelling its growth over the years.
This fintech stock is pushing forward, as it recently introduced a major product offering that may just prove to be a bullish indicator for the ultimate cryptocurrency. Here's what investors need to know.
Image source: Block.
Square just introduced a new feature for sellers
In November last year, Square, Block's segment that caters to sellers, introduced Bitcoin payments, enabling these small businesses to start accepting transactions from shoppers with the top digital asset. Plus, Square launched Bitcoin conversions; merchants have the ability to convert a portion of their daily card sales into the cryptocurrency. These moves essentially make it frictionless for merchants to adopt Bitcoin.
This is only available to merchants in the U.S. (excluding New York). And there are verification requirements that must be met. It's a significant development, nonetheless.
As of the end of 2023, Square's customer base consisted of more than 4 million merchants in total. The vast majority of Square's gross payment volume was in the U.S. Using a rough estimate, the Bitcoin functionality is likely available for millions of merchants domestically.
Fintech peer SoFi Technologies is also working to innovate with Bitcoin. The digital bank, which has 13.7 million customers, is partnering with start-up Lightspark to facilitate fast and cheap cross-border transactions using the Lightning network. This is another example of a forward-thinking financial services entity that's not ignoring Bitcoin's potential.
NYSE: XYZ
Key Data Points
Pushing to become a medium of exchange
Bitcoin has been a tremendous asset, rising 22,770% in the last decade (as of Jan. 30). Of course, it has its fair share of critics that argue the crypto has no intrinsic value. That monster gain can't be denied, though.
Indeed, Bitcoin was and still remains a tool for financial speculation. People mostly buy it because they believe its price will continue to go up over the long run.
Now that Block has launched payments functionality, Bitcoin is taking a huge step forward to becoming a more accepted medium of exchange. Any commentary management gives about the uptake of this new feature in the future will provide valuable insights.
If adoption is strong, other companies within the financial services sector might want to take the leap as well. This can drive demand for Bitcoin, which can ultimately support a higher price over time.
