Block (SQ) Boosts Reach to Canada With Tap to Pay on Android
Block SQ continues to make strong efforts to bolster its presence in Canada on the back of its comprehensive solutions. This is evident from its latest launch of Tap to Pay on Android for sellers in Canada.
Tap to Pay on Android, designed to meet the growing demand for contactless payment, is backed by Square’s software, which offers a smooth and straightforward checkout experience.
Tap to Pay on Android allows sellers to accept contactless payments made via a contactless credit card or credit card with a digital wallet seamlessly.
With the underlined feature, sellers are not required to bear additional costs for their payment setup. Payments will be easily done through a compatible Android device and the Square point-of-sale app.
The feature ensures that sellers never miss a sale and gain more flexibility to use new commerce tools.
We believe Square is expected to gain momentum among various sellers in Canada with Tap to Pay on Android. This, in turn, will likely aid growth in the overall seller base of the company as part of the Square ecosystem.
In second-quarter 2023, Square ecosystem generated $1.93 billion in net revenues, up 12% year over year. It yielded a gross payment volume (GPV) worth $54.15 billion (91.8% of the total GPV) in the same quarter, up 13% year over year.
Our model estimate for 2023 Square ecosystem revenues stands at $7.34 billion, indicating growth of 9.6% year over year.
Block, Inc. Price and Consensus
Block, Inc. price-consensus-chart | Block, Inc. Quote
Strong Contactless Payment Efforts
The latest move bodes well with Block’s growing initiatives toward offering seamless contactless payment options to its sellers.
In addition to Canada, Square launched Tap to Pay on Android for its U.K. retailers in the first half of 2023.
Recently, Block formed a partnership with Apple AAPL to integrate the Square Point of Sale (POS) app with the latter’s contactless payment acceptance feature named Tap to Pay on iPhone.
Apple’s Tap to Pay on iPhone incorporates Block’s broader ecosystem of tools, which help sellers smoothly start, run and grow their businesses.
Sellers with an iPhone and Square POS app will be able to accept in-person contactless payments safely and seamlessly.
This apart, Block offers a contactless chip reader, which helps sellers quickly receive money in their bank account by accepting chip cards, contactless NFC (near-field communication) cards, Apple Pay and Google Pay from anywhere.
Growth Prospects
These growing efforts are helping this Zacks Rank #3 (Hold) company expand its presence in the booming contactless payment market. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The underlined market is witnessing significant growth owing to rising demand for seamless and faster processing of payments. A surge in digitalization and an increase in online shopping across the globe are acting as key factors.
Per a Precedence Research report, the global contactless payment market is expected to reach $132.42 billion by 2032, witnessing a CAGR of 16.1% between 2023 and 2032.
The abovementioned efforts are also likely to boost Block’s footprint in the digital payment market. A Statista report shows that transaction value in this market is expected to hit $9.5 trillion in 2023 and reach $14.8 trillion by 2027, registering a CAGR of 11.8% between 2023 and 2027.
The growing prospects of Square in these booming markets are expected to instill investor optimism in the stock.
However, rising competition from some notable players like PayPal PYPL and Shopify SHOP in the digital payment space remains a concern for SQ.
Block has lost 29.8% on a year-to-date basis against the industry’s growth of 12.6%.
PayPal has been benefiting from its peer-to-peer payment service, Venmo, for a while. Venmo’s improving monetization efforts and its rising adoption rate across various platforms are aiding growth in total active accounts, which is noteworthy. The solid momentum of core peer-to-peer and PayPal Checkout experiences is another tailwind.
Shopify is winning merchants regularly owing to its robust product offerings, including Shop Pay and Shop Pay Installments. Checkout using Shopify Payments, which is directly integrated with Google, Facebook and Instagram, enables merchants to sell across these channels easily. This is helping Shopify strengthen its momentum among merchants.
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