Square’s Investment in Cash App Beginning to Bear Fruit

Square’s (SQ) peer-to-peer payment service Cash app is now more popular than PayPal’s (PYPL) competing service Venmo, according to data from app research firm Sensor Tower and Wall Street firm Nomura Instinet. Cash app’s accumulative downloads hit 33.5 million at the end of July, surpassing Venmo’s cumulative downloads of 32.9 million, Nomura wrote in a research note cited by CNBC. The Cash app has never racked up more downloads than Venmo, so the data indicate a milestone for Square in its race with PayPal to dominate the peer-to-peer payment market.

The milestone was achieved after Square’s Cash app downloads grew three times faster than Venmo app downloads in July.

Square has been introducing new features in its Cash app to encourage use among its existing customers and bring new customers to the service. For example, Cash app users can now withdraw their funds from an ATM using an associated debit card. Square said that ~$250 million was spent through the Cash app in June, a threefold increase from December 2017.

To enhance the appeal of the Cash app, Square has introduced the ability to buy and sell bitcoin for a profit in the app.

Competition is hot in the peer-to-peer payments market, leading Snap (SNAP) to shut down its peer-to-peer payment service Snapcash. Facebook (FB) and Google (GOOGL) are also in the digital payments business. Facebook’s payment revenue rose 23% YoY (year-over-year) to $193 million in the second quarter. Google’s revenue from operations, which includes offering digital payment services, rose 37.5% YoY to $4.4 billion in the second quarter.