Cash App, the peer-to-peer fintech app from Jack Dorsey’s Block, has introduced a “pay-over-time” feature that lets eligible users defer payments for transfers over an extended period.
Deferred payments for everyday purchases have become more common, with companies like DoorDash partnering with Klarna for food order financing, a move that sparked jokes about “burrito debt.” Cash App’s feature extends this trend into P2P payments.
Users pay a 7.5% fee to use the feature—$100 borrowed requires a $107.50 repayment. Transfers over $25 are eligible, with repayments in weekly increments for up to six weeks or as a lump sum at the due date.
Loan limits vary per user based on individual assessments. A spokesperson explained, “We evaluate each transaction for eligibility based on responsible lending criteria rather than setting traditional credit limits.”
Block’s Global Head of Business, Owen Jennings, described the feature as enhancing “cash flow management” amid evolving job landscapes, with many Americans experiencing irregular income.
Jennings stated, “More folks—especially younger ones—are solo-preneurs, entrepreneurs, [and] gig workers, working multiple jobs with variable incomes.” Unlike 40 or 50 years ago, where income was more stable and consistent, today’s income streams are diverse.
“Buy now, pay later” services have become popular, also attracting criticism. Critics argue these services can trap consumers in debt cycles and reflect broader economic issues. Recently, Klarna faced a lawsuit for alleged “predatory” practices.
Jennings assured that Cash App’s feature includes safeguards to prevent debt spirals, stating, “Our lending products are non-revolving. If you don’t pay back a loan, you can’t take out another.”
The service complements existing Cash App financial flexibility offerings. Previously, the app launched Borrow, allowing users to take small loans repayable over 4-6 weeks. Another option is Afterpay for Cash App Card users, enabling deferred payments for card transactions.