The news: Block’s Square and Cash App both expanded the services they offer their respective bases to offer a richer array of services: Square launched high-yield savings for merchants, and Cash App rolled out budget-friendly phone plans.

• Square merchants can earn HYSA rates at 3.5% APY after depositing at least $10,000 in their Square Savings accounts. 
• Cash App’s unlimited 5G phone plans are priced at $40/mo and powered through AT&T.

How we got here: Fintechs are making their apps sticky by loading their ecosystems with more essential features. Many are leaning into affordability as consumers navigate higher prices from tariffs and the war in Iran.

• Klarna debuted a HYSA to encourage more banking on its app this month.
• It also introduced its $40/mo phone plan last June.
• Sezzle and OnePay both launched phone plans at $35/mo and $29.99/mo, respectively.

Following the success of Cash App’s all-in-one financial offerings, Block appears to be repeating the playbook for Square, deepening savings rewards while expanding lending services.

Implications for payment providers: Fintechs are giving SMBs and consumers more reasons to abandon legacy providers by bundling various financial and essential services within one platform. This is especially compelling for clients who have been overlooked by traditional FIs. 

However, fintechs face a barrier without any brick-and-mortar locations, which some customers prefer to sort out complex financial issues. Legacy FIs can flex their spread bank branches to combat fintechs on customer-service quality.

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