In this photo illustration, logo for the US Tech firm “Block” has been displayed and reflected in several digital screens on March 03, 2023 in London, England.
Leone Neel | Getty images
This year, with more than 30% stock, more revenue growth slowed down, of Jack Daresi block Growing up in lending.
The company said on Thursday that it obtained approval from the Federal Deposit Insurance Corporation to generate the loan through its banking assistant, square financial services, allowing it to offer consumer loans of small-dollars directly instead of relying on external banking partners.
This cash app is an extension of borrowing, the company’s short -term lending product. But this comes in the time of increasing concerns around the consumer credit, with President Trump’s huge tariffs and a potential recession with a widespread government job cut.
Loss of transactions in the lending segment of the block jumped 39% in the last quarter, and while the company claims that its underwriting model is strong, small-dollar borrowing is naturally risky.
The block said in a press release, “Cash app borrowing is designed to provide short -term cash flow in a simple and accessible way when options are notorious and difficult for consumers to navigate.” The company said that the average cash app lending loan was under a period of $ 100 and about a month.
The block did not immediately give a comment.
In obtaining approval to operate the borrowed business from its own bank, the block says it will be able to offer nationwide product.
Last month, the block reported quarterly results that missed the expectations of Wall Street, the revenue increased by just 4.5% from a year ago. The stock declined by 18%, since 2020 its worst one day decline.
At the same time, the block later rolled out, its purchase now, later pay the product, on the cash app card. Chief Financial Officer Amrita Ahuja told CNBC that the launch aims to provide more credit options to customers, and the cash app has been deployed as a banking option for some customers. Block acquired afterpays, which competes VoiceFor $ 29 billion in early 2022.
This week also, the block announced a major investment plan in Artificial Intelligence.
The company said on Wednesday that it would be posted Navidia The AI system to power the open-source AI research with its latest blackwell chips. The block did not say what it is looking to get especially to get through its AI Buildout, but the press release mentions that it will “start searching for novel solutions for our customers.”
Watch: Block share drop after earning
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