SAN FRANCISCO - In a move to cater to the payment preferences of younger consumers, Lyft (NASDAQ:LYFT) has partnered with Cash App to offer Cash App Pay as a new payment method for its ride-hailing services, starting today. This collaboration aims to provide digital-first customers with more flexibility and convenience when using Lyft.
The integration of Cash App Pay into the Lyft platform allows riders to link their Cash App directly to the Lyft app, streamlining the payment process without the need for physical cards or manual entry of payment information. This feature targets Gen Z and Millennials, who, according to recent customer satisfaction studies, show a strong preference for financial technologies like Cash App over traditional banking services.
Jordan Glassberg, Lyft's VP of Partnerships and Loyalty, highlighted the partnership's goal to make paying for rides as easy and rewarding as possible. Tanuj Parikh, Head of Partnerships at Cash App and Afterpay, expressed excitement about the collaboration, noting its significance in offering more payment options within the rideshare industry.
The partnership is expected to benefit both companies by leveraging Cash App's substantial user base of 57 million monthly transacting actives and Lyft's 23.7 million active riders reported in the second quarter of 2024.
Lyft, a major transportation network in North America, offers a variety of mobility options including rideshare, bikes, and scooters through its app. The company prides itself on its customer-centric approach and commitment to providing flexible work opportunities for drivers.
Cash App, a popular financial platform, allows users to send and receive money, buy and sell Bitcoin, and use a Visa (NYSE:V) Debit-linked Cash App Card for transactions. It is not a bank, but it partners with external banks to provide banking services.
This partnership underlines a broader trend in the financial industry, where consumers increasingly seek alternatives to traditional financial systems. By offering a new digital payment solution, Lyft and Cash App are responding to this demand, particularly among younger demographics.
The information for this article is based on a press release statement.
In other recent news, Block Inc. has demonstrated substantial growth in its Q2 earnings, with a 20% increase in gross profit to $2.23 billion, and a 23% year-over-year surge in Cash App's gross profit to $1.3 billion. The company's adjusted EBITDA nearly doubled to $759 million, and adjusted operating income rose notably to $399 million. Wolfe Research reiterated its Outperform rating for Block, acknowledging the company's innovative edge and potential for long-term market share growth. The firm also highlighted recent initiatives by Block, such as banking and direct deposit features in Cash App, as potential drivers for substantial inflows into the company's ecosystem.
Block Inc. has launched a new Orders Platform, offering expanded commerce capabilities to U.S. sellers. The platform provides more flexibility at checkout, including options for ordering ahead, opening a bar tab, or setting up subscriptions. KeyBanc reiterated an Overweight rating on Block Inc., emphasizing that the platform bolsters Square's competitive edge, particularly in the restaurant and service sectors.
Various analyst firms have provided their ratings on Block Inc. Deutsche Bank and BofA Securities maintained their Buy ratings, while Mizuho Securities reduced its price target but kept an Outperform rating. New Street Research initiated coverage on Block shares with a Neutral rating, emphasizing the importance of reversing market share losses and fostering a balanced ecosystem. These are recent developments for Block Inc.
InvestingPro Insights
As Lyft partners with Cash App to expand its payment options, it's worth examining the financial health of Cash App's parent company, Square (SQ). According to InvestingPro data, Square boasts a market capitalization of $45.24 billion, reflecting its significant presence in the financial services sector.
Square's revenue growth of 19.36% over the last twelve months as of Q2 2023 aligns with the company's strategy to expand its ecosystem and partnerships, such as the one with Lyft. This growth trajectory is further supported by an InvestingPro Tip indicating that net income is expected to grow this year, potentially bolstering investor confidence in Square's financial performance.
Another relevant InvestingPro Tip highlights that Square is trading at a low P/E ratio relative to its near-term earnings growth. This could suggest that the stock may be undervalued considering its growth prospects, which may be of interest to investors looking at companies innovating in the digital payment space.
For those interested in a deeper analysis, InvestingPro offers 8 additional tips for Square, providing a more comprehensive view of the company's financial position and market performance. These insights can be particularly valuable when assessing the potential impact of partnerships like the one with Lyft on Square's future growth and market position.
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