Cash App and Afterpay: A New Way to Manage Payments

Block is reframing Afterpay’s pay later service as a cash-flow aid by building it into the Cash App debit card as U.S. consumers contend with inflation.

Earlier this month, Cash App broadened its offering so users can convert peer-to-peer transfers and wallet purchases into short-term installment plans through Afterpay. The company now provides a physical and virtual debit card, the Cash App Pay wallet, and Afterpay’s pay later option integrated into the Cash App Card experience for eligible purchases.

In practice, using Afterpay starts with choosing a participating merchant and selecting Afterpay at checkout (or initiating a pay later plan from an eligible purchase tied to the Cash App Card). The customer links a payment method, reviews the terms shown before confirming, and then manages upcoming payments and notifications in-app.

Afterpay typically breaks a purchase into four equal installments billed on a predictable, short schedule; the full payment calendar and amounts are shown up front before the customer confirms the plan.

Afterpay generally requires an initial installment at checkout rather than letting a customer complete the purchase with nothing due that day. The exact amount due immediately is displayed during checkout, and approval can vary by customer and transaction.

Afterpay generally does not charge interest on standard installment plans, but it can charge late fees if a scheduled payment is missed or cannot be collected. The specific fees and any caps can depend on the user’s account status and applicable rules where the customer lives.

Spending limits with Afterpay are not one-size-fits-all. Limits can start relatively low and adjust over time based on factors such as repayment history, the size of a purchase, and other eligibility signals assessed at checkout.

Afterpay is common among merchants in categories such as fashion and retail, beauty, home goods, and other everyday shopping verticals. Users can typically find participating merchants by browsing the Afterpay marketplace in-app or by looking for Afterpay as a checkout option with a given store.

Returns and refunds are handled through the merchant first. Once the merchant processes a return, Afterpay updates the plan accordingly—often reducing or canceling remaining payments—and any refunded amounts are generally sent back to the original payment method, which can take time to post.

Compared with other buy now, pay later providers such as Affirm, Afterpay is often positioned around shorter, split-payment plans, while Affirm commonly offers a wider mix of term lengths, including longer repayment options that may carry interest depending on the plan. Both services can approve transactions at checkout and can be used through card-linked experiences, but their product structures and repayment options can differ.

Many buy now, pay later plans are approved with an eligibility review that may not rely on a traditional hard credit inquiry; on-time payments are not always reported to credit bureaus, but missed payments that escalate to collections can still affect a consumer’s credit profile.

The trade-off with pay later is straightforward: it can smooth cash flow and provide a clear payoff timeline, but it can also encourage extra spending and create fee risk if a payment is missed or a customer stacks multiple plans at once.

According to the company, many of its 59 million monthly active users earn income from multiple sources, on irregular schedules and in varying amounts.

About 70% of monthly users work in flexible roles such as gig work, freelancing, content creation, or solo entrepreneurship. Cash App said many in this cohort remain underserved by traditional U.S. financial infrastructure and lenders.

Affirm Holdings, a key rival in pay later, also supports deferred payments via a debit card and is marketing its technology to banks and credit unions for use with their own cards.

Tanuj Parikh, North America head of revenue for Cash App and Afterpay, discussed plans to expand Afterpay’s merchant network and the goal of offering multiple ways to pay in a June 17 interview.

Editor’s note: This conversation was condensed and clarified for readability.

Does Cash App Care Whether Users Borrow if They Pay With Company Products?

Tanuj Parikh: We are largely method-agnostic. A customer might use the debit card one day, pick Afterpay the next for a higher-ticket item, then choose Cash App Pay for a fast checkout on a delivery app because it is saved on file. Our goal is to be top of wallet by offering three payment options that match a person’s income timing, the merchant, and the purchase size.

How Much Do the Two Audiences Overlap?

There is notable overlap, but also clear differences. Afterpay’s core tends to be slightly older, more core millennial, and higher income. Cash App’s user base is much larger and spans many segments, but it generally skews younger with relatively lower income.

Long-Term Outlook for Pay Later and Merchant Adoption?

We see significant runway. Even in our core areas of fashion and retail, many merchants still do not offer an installment option. Beyond that, we expect deferred-pay flexibility to extend into new product categories. Bringing it to the Cash App debit card delivers credit-like functionality to a debit-first audience.

Cash App Credit Score: Where Does the Project Stand?

We are actively developing it and remain in the early stages. We are confident in our underwriting approach, mapping where it fits, and engaging potential partners and providers who could apply it to assess eligibility.

Revenue Growth Priorities: Merchant Network and Payment Option Mix

Our commerce strategy centers on expanding the merchant network. There is room to deepen in categories where we are strong and to move into new verticals. Each product has distinct opportunities: pay later opens certain sectors, while Cash App Pay, as a direct digital wallet, is gaining traction in streaming, digital goods, and everyday spend at quick-service restaurants.

How Will You Keep Customers as They Age and Earn More?

We focus on maintaining a product set that evolves with customers along their age and income curves. Beyond today’s short-term Cash App loans and Afterpay, we aim to stay ahead of shifts in how Americans earn, manage, and spend so the suite remains relevant over time.