Cash App, Square Inc.’s mobile payment app, has launched a pilot program to offer short-term loans of up to $200… Under the terms of the loans, which start at $20, payment is due within four weeks. A one-week grace period has been added for users who miss that deadline.
There is a flat 5 percent fee. After the grace period, there will be an additional 1.25 percent of non-compounding interest weekly. After a year, that adds up to a 65 percent APR…
This is the latest feature Square has added to Cash App’s features beyond peer-to-peer money transfer, joining its free debit card, rewards and investing offerings. Square has been offering loans to small businesses through its Square Capital arm.
Last week, Square reported $1.92 billion in net revenue for the second quarter, up 64 percent compared to the same period one year ago… Cash App, which competes head-to-head with PayPal’s Venmo, was the key factor that drove Square’s profitability in Q2.