Cash App, owned by Block, has launched a deferred payment feature that allows eligible users to spread the cost of peer-to-peer transfers over time. The feature extends “buy now, pay later” style financing into everyday money transfers between users.
Feature Allows Installments On Transfers With Fixed Fee
The new option lets users convert transfers of $25 or more into installment payments. A 7.5% fee applies, meaning a $100 transfer would require repayment of $107.50. Users can repay the amount in weekly installments over up to six weeks or as a single payment at the due date.
Loan limits vary by user. The company said eligibility depends on the original transaction and an individual assessment rather than fixed credit limits. A spokesperson said each transaction is evaluated using internal lending criteria.
Expansion Follows Growth Of Deferred Payment Services
The feature builds on a broader rise in deferred payment services for everyday spending. Last year, DoorDash partnered with Klarna to allow users to finance food orders.
Cash App’s rollout extends similar financing models into peer-to-peer payments, which are typically used for routine transfers.
Company Positions Feature As Cash Flow Support
Owen Jennings, executive officer and head of business at Block, said the feature is designed to help users manage irregular income. He noted that more users, particularly younger workers, rely on gig work, multiple jobs, or independent income streams.
Jennings said these income patterns differ from earlier periods when workers commonly received consistent paychecks at regular intervals.
Criticism Of Buy Now Pay Later Models Continues
Deferred payment services have grown in popularity in recent years, alongside criticism and regulatory scrutiny. Some critics argue that such products can lead to cycles of debt, while others point to their use for basic expenses as a sign of financial strain.
Companies offering these services have also faced legal challenges. Klarna is currently facing a class-action lawsuit alleging predatory practices, according to Bloomberg.
Cash App Adds Safeguards And Builds On Existing Tools
Jennings said Cash App’s system includes safeguards intended to prevent users from accumulating debt. The lending model is non-revolving, meaning users cannot take out a new loan until an existing one is repaid.
The feature builds on Cash App’s existing financial tools. The app previously introduced Borrow, which allows users to take small loans repaid over four to six weeks. It also offers Afterpay integration for its debit card, enabling deferred payments for card transactions.
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