The news: Cash App users can now make online payments via Cash App Pay to merchants that don’t use Square, per TechCrunch.

• The Block-owned app partnered with major retail brands like American Eagle and JD Sports for the launch, and it expects other merchants to join in the coming months.
• Users can get discounts and promotions from these merchants when they shop on Cash App’s Discover tab, or they can check out with a dedicated Cash App button on merchants’ websites.

Why it’s worth watching: The rollout further broadens Cash App’s use cases beyond peer-to-peer (P2P) payments and can help monetize the platform.

• Starting out with P2P payments let Cash App build a large user base. The number of US Cash App users is expected to hit 47.8 million this year, according to Insider Intelligence forecasts.
• And now Cash App wants to monetize these users by letting them transact outside of its Square ecosystem—bolstering Block’s gross payment volume, which increased 23% year over year (YoY) in Q2.
• It can also help Cash App capture more ecommerce volume. US retail ecommerce sales are expected to reach $1.050 trillion in 2022, per eMarketer forecasts from Insider Intelligence.

Block invested heavily in Bitcoin features in recent years to engage and monetize Cash App users. But a long, deep crypto winter may have pushed Block to explore other growth avenues: Block’s Q2 Bitcoin revenues sank 34% YoY.

The opportunity: Enabling Cash Pay for third-party retailers can help Block compete more aggressively with PayPal, whose Venmo already lets users make payments on websites like Amazon and Adidas. Offering the same capabilities erodes some of the competitive advantages Venmo had against Cash App.

PayPal and Block are no strangers to competitive one-upmanship. For instance, Block announced its Afterpay acquisition roughly a year after PayPal introduced its first buy now, pay later (BNPL) product, Pay in 4. And PayPal has scaled its in-store POS solutions to contend with Block’s Square products.

This article originally appeared in Insider Intelligence's Payments Innovation Briefing—a daily recap of top stories reshaping the payments industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.

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