Amrita Ahuja: Yeah, I’ll start off Harshita on Cash App Pay. We’re really excited about the progress that we’ve seen over the past year and how quickly we’ve been able to drive growth, as we’ve expanded to more and more merchants. This is a key part of how we integrate commerce, tools, and more broadly into Cash App over the next several years. We see Cash App Pay as a seamless way for customers to spend, especially online, and provides more ways for our customers to spend beyond using Cash App Card. We ended December with 3 million monthly actives and $2.5 billion in annualized GPV, which has more than tripled since what we reported you last June. Growth here has been driven through recent partnerships such as DoorDash, Adient, and Stripe.
We have a strong pipeline as well of large merchants. We’re exploring to continue to extend our reach. Of course, Afterpay’s enterprise sales team has been critical here and allowed us to scale quickly by leveraging existing relationships and the quality of their sales organization. I think the second part of your question was about Cash App commerce or can you repeat the other? Do we answer your question, Harshita?
Harshita Rawat: Oh, yes. Yes, so just the compliance investment, just more broadly within Cash App, not just related to Cash App Pay, especially as we focus now more into banking.
Jack Dorsey: Sorry, compliance investment more broadly across the company?
Harshita Rawat: No, within Cash App, I was just kind of thinking about some recent media reports suggested regulatory [Multiple Speakers]
Jack Dorsey: Yeah, absolutely. So, compliance is a complaint, security, fraud, risk. These are all areas that are constant iterations. We’re never going to build a perfect system. We can only focus on velocity and speed. And any areas that we’ve had in the past, our goal right now is to make sure that we correct them quickly. And that we continue to build those learnings into the future. And then we stay 10 steps ahead of any adversaries. And that’s been a big focus for us for years. But we put even more emphasis on this right now because we do want to earn more trust with the use case of banking and being that primary bank for people. And obviously, this is a big, big part of having that trust. We want people to trust that if they put 100% of their paycheck into Cash App’s direct deposit and utilize it, that — it’s sounds and they can do everything that they want without restriction, and that it just works.
So this is a significant investment for us and we’ll continue to grow. But we have entirely new technologies available to us now that makes this work even more efficient and much better. And we can be far more exhaustive and far more precise in our approach than we have ever in the past.
Harshita Rawat: That’s helpful .
Operator: Your next question comes from the line of Trevor Williams from Jefferies. Please go ahead.
Trevor Williams: Great. Thanks for taking the question. I want to follow up on the product pipeline in Cash App, especially around commerce and the new products you expect to layer in this year. In the letter, Cash App Card was mentioned as a way to distribute BNPL, which I think that’s something we haven’t heard from you guys before. If you could dig into that. And then just how much contribution at least within what you’re expecting for Cash App that you’re baking in from some of these newer initiatives around commerce within the full-year outlook. Thanks.
Jack Dorsey: Yea, I mean, so we’ve been doing a bunch of work since we first acquired Afterpay. As you all know, we had more or less split the yard between Square and Cash App. We realized last year that was incorrect. And now we should put the majority of it within Cash App because that’s where the greatest benefit is going to be. And that’s first and foremost in discovery in Cash App, and discovery of commerce, whether that be global Internet commerce — e-commerce or more local commerce, such as Square merchants. But we have an incredible asset in Afterpay and we have an incredible asset in the Cash App Card and that distribution. So we’re looking for all the tools, all the financial tools that Afterpay has created will be right within Cash App and right within the card.
And as I talked about on past calls, you can imagine just as you would on the Cash Card today in the app, you can turn on boost and get offers and see these things in real-time and interchange them. We want that same sort of feeling for Buy Now, Pay Later on the card itself. And this opens the door for our customers to treat every single merchant that they go to as a Buy Now, Pay Later entity, which is pretty awesome and pretty cool, and we’re excited about it. So there is a lot there with the financial tools within Cash App and also within the Afterpay app itself. Within Australia, we have a lot of opportunity to continue to grow and to push, but this will be a year of much, much tighter integration and much more visibility of the Afterpay tools and the use cases within Cash App itself.
Amrita Ahuja: And in terms of how we think about our outlook with respect to some of these newer products that we’ll be launching later this year and into next year. As I said earlier, our guide is based on primarily on our current run rate trends in the business, and known elements around expenses and growth levers. And typically, we’re moving quickly to improve our product velocity. But typically, as we launch these products they take time to ramp. So I’d expect to see greater benefits later in the year, but primarily heading into 2025 and beyond, as we move quickly against these commerce and banking and financial services products within Cash App.
Operator: Your next question comes from the line of Bryan Bergin from TD Cowen. Please go ahead.
Bryan Bergin: Great. Thanks so much for taking the question. Do your broader banking aspirations require you to do anything different on the banking license side, or ask differently, should your efforts in the banking side be successful? Can you still leverage partner banks or do you need to go with direct licenses? Thanks.
Jack Dorsey: Yeah, great question. It doesn’t necessarily require us to do anything differently. We do have Square Financial Services, our bank. And we’re very excited about the expanded potential use cases that we can utilize for — in addition to the ones today, which are around loans. So we want to make sure that the bank itself can help us provide more efficiency and provide speed, much tighter integration so that we can have much more cohesive experiences. And it doesn’t limit us from using partner banks. You can think of these as a portfolio. We can use multiple banks, including our own, to do various things in the future. And we have a lot more flexibility as that comes more online. And what’s fully going to rule all this is the product experience that we can offer to people.
And obviously, that we can do it with new technology that makes it easier and much more profitable than a traditional bank could. So that is our focus and we don’t see any significant changes in how we build products coming up.
Bryan Bergin: Great. Thanks very much.
Operator: Your next question comes from the line of Ken Suchoski from Autonomous Research. Please go ahead.
Kenneth Suchoski: Hi, good afternoon. Thanks for taking the question. I think you mentioned in the quarterly letter that the 2022 and 2023 Square cohorts are tracking to a six-to-seven quarterly payback period. How are you guys thinking about the payback period for 2024 and 2025? And if you can comment on how you’re thinking about marketing spend in Square for the year, that would be great. Thanks so much.
Amrita Ahuja: Sure. Happy to kick off on what we’ve seen recently and what we expect moving forward. As we orient primarily to ROI, the returns that we see over a four-year period in how we go to market across the Square ecosystem. And as we are able to attach more products to our customers as they are able to grow on our platform that extends the lifetime value of these customers and ultimately what we’re able to invest into go-to-market initiatives to bring customers into the Square ecosystem. So I would orient you more to ROIs where we’ve seen healthy ROIs at sort of 3x over four years in the past, and we’ll continue to focus on ROI moving forward. Across our initiatives, I think the key focus for us is the pace of experimentation across both sales and marketing.
We’re going to orient more of our spend in marketing to proven channels, but we’ll have a number of our efforts from a team perspective on trying new things in small ways so that we can iterate rapidly and learn whether that’s in sales, where we’ve now deployed contracts, or where we’re taking a local approach with referrals, or we’re bundling our products differently, as we did with the restaurant’s essentials bundle to create simple pricing, one simple price for a set of customers across the restaurants vertical. We are doing a number of different things to drive cohesion in how a customer can onboard into the Square ecosystem. And as Jack mentioned earlier, some of the product initiatives around our single app strategy and our platform initiatives are key unlocks for us as we think about more efficient onboarding of customers into the broader ecosystem.
Jack Dorsey: The only thing I’d add there is, as I said in the letter, we’re doing a reorg with Square back to a functional organization. And one of the results of that is going to bring — is to bring product and marketing much, much closer together. This is how we started the company. And we believe that the gaps that we had in the recent past really hurt our aspirations and our execution. And the reason why is, we want to make sure that there’s a very, very smooth ramp from any marketing that we do and that it’d be targeting — targeted or more out of home. And the actual sign-up flow and the customer experience they get when they come to the website or when they get a number to call one of our sales folks. So the organizational structure, I think will help illuminate a lot of the issues we’ve had in the past. And we’re focused on really making sure that they work together a whole lot better so we can move much faster.
Kenneth Suchoski: Great. Thanks, Jack. Thanks, Amrita.
Operator: Your next question comes from the line of Bryan Keane from Deutsche Bank. Please go ahead.
Bryan Keane: Hi, guys. Wanted to ask about the Cash App monetization rate. I think it was up 5 basis points sequentially. If I recall correctly, I think you thought it would be more stable sequentially. So, I guess, what kind of surprise and drove the outperformance in the monetization rate? I think you called out Bitcoin and pricing. So just curious, exactly on the pricing side where that’s coming from? And then any color on how monetization rate will trend as we go through 2024.
Amrita Ahuja: Sure. So what we saw in the fourth quarter was 9 basis point improvement year-over-year and 5 basis point quarter-over-quarter. To your question specifically on quarter-over-quarter, there are a couple of different factors at play, but the primary ones were around Bitcoin, and within Bitcoin, it was both the pricing of the product as well as the price appreciation of Bitcoin itself, which benefited monetization rate on a sequential basis. As we look forward, we see opportunities in 2024 around actives and inflows proactive as the primary drivers of growth for Cash App in 2024. As we look longer term, we see opportunities around monetization rate as we go deeper in the financial services ecosystem and we attach more of these products to our customer base, as our customers take on more and more products themselves, we see an opportunity to grow monetization rate.
But as we’ll be lapping some of these pricing changes coming up in 2024, we don’t expect a meaningful change in monetization rate, and certainly not at the meaningful level that we saw during 2023.
Bryan Keane: Thank you.
Operator: Your next question comes from the line of Pete Christiansen from Citi. Please go ahead.
Peter Christiansen: Thank you. Good evening, and thanks for the question. I’m curious, could you walk us through the mechanics on the yield, the savings product for direct deposit users, and Cash App. And Amrita, I’m curious your thesis on, I guess, the relative unit economics for that particular product, and how you see that evolving. Thank you.
