Are people ready to borrow from their friends—and pay them back in installments? Cash App is betting they are. The popular payment app launched a feature that lets users split peer-to-peer (P2P) transfers into short-term installment plans, turning everyday money exchanges into mini loans.
While buy now, pay later options have surged in retail, Cash App is the first major U.S. P2P platform to bring pay-over-time capabilities to peer-to-peer payments. Users pay a 7.5% fee on the transfer amount, with weekly repayments stretching up to six weeks. The minimum transfer to qualify is $25, while the maximum varies by user.
A Younger, More Gig-Oriented Market
Cash App’s user base skews younger and lower-income—groups that may benefit from spreading out P2P payments. The feature could become even more valuable if current economic pressures persist.
In an interview with TechCrunch, Owen Jennings, Global Head of Business for Block, Cash App’s parent company, noted that many Americans now earn income less consistency than in the past. “They have side hustles, they’re working multiple jobs, so they have variable income streams,” Jennings said. That’s the market Cash App hopes to appeal to with the new feature.
Deferring Even Small Payments
Deferring payments has become increasingly common, even for relatively small purchases. Last year, Klarna partnered with DoorDash to let consumers split takeout orders into installments, sparking jokes about taking a month to pay for a burrito.
DoorDash’s plan allowed users to choose payment dates aligned with their paychecks—buy dinner on Tuesday, pay Friday. Cash App hopes for a similar response. Users could send money to friends before it even hits their own banking accounts.
The feature also lets eligible customers turn recent P2P payments into short-term installment plans, instantly receiving the amount back in their balance for an upfront fee and repaying it in weekly installments. Cash App rolled out a similar installment-payment feature a year ago for its debit cards, allowing users to retroactively apply BNPL financing to purchases.
