Recent poll of 300 top managers showed that more than a half of bank managers and credit unions consider such companies as Amazon and Google to be a serious threat for banking industry.
Why should banks, not Google care for space?
Banks should convince that although Amazon and Google are perceived as a threat for the banking sector, they are in fact on the way to become sellers or means of official distribution among banks while Square is going to become their direct competitor. Adoption and usage of Bitcoin by the company make it more profitable for clients than ever.
As reported in Wall Street Journal, Google will start to offer account monitoring to consumers in 2020 as a part of its promotion for financial services. The product is called “Cache” and it will be run by Citygroup and small creditor called Stanford Federal Credit Union. Nevertheless, Google payment service is not intended for competition with bank checking accounts but it expands opportunities of banks. In addition, Google launched an instrument of artificial intelligence to help banks to analyze its credits and improved considerably its cloud storage services for financial institutions. In contrast, 75000 of Square Capital borrowers can offer new possibilities for activation of lending in post-crisis period. As the number of huge dealers is increasing, FinTech technology is ready to take considerable part of small level of lending for banks. Bitcoin utilities and Cash application.
As reported in Forbes, recent poll of banking industry shows that Square can pose more threat for a traditional banking sector than such giants as Tech Amazon and Google. The article assumes that rapid growth and popularity of Square comes down to the number of Cash App services that can increase its revenue. As for its utility, it can be increased due to crypto currencies that make it more profitable for the elderly people and Gen Xers.
Square company added a number of Cash App services, that can raise revenue and a recent push to highlighting of the functions helped her to reap the benefits from them. According to Seeking Alpha, “Cash App” is used now for tax refund, stimulating deposit and working check. Moreover, due to the sharp rise in investment to retail trade, Cash App application allowed people to buy stocks and Bitcoins by means of widely available functions, such as a partial investment and recurring purchases. P2P-web Cash App is “the best data collection channel”, said Jack Dorsy, the head manager, because existing users attract more consumers sending and requesting funds.
According to Forbes, Cash App income for the first quarter of 2020 accounts for 528 million dollars that is three times more than in the first quarter of 2019. As for Bitcoin and Square news, the considerable part of the income of the Fintech Company was $306 million in crypto that is $65 million more than last year. As the financial results show, the importance of Bitcoin for price rises for Square is impossible to overestimate because Fintech manages to capture the market that other digital banks or banks competitors don’t provide service.