The news: Cash App is considering expanding its lending product lineup to serve more of consumers’ needs as they enter new financial life stages, per an interview with Payment Dive.

Tanuj Parikh, the North American head of revenue for Cash App and Afterpay, said that the payment provider is exploring whether it has “the right products to keep [its consumer base] within our ecosystem” as those users “move up the age and income curve.”

How we got here: Cash App Afterpay is a major provider of buy now, pay later (BNPL) “pay in 4,” per the Federal Reserve.

Block has expanded loans and credit opportunities for both consumers:

• Cash App launched an installment product for P2P payments.
• And Block integrated Afterpay into the Cash App card last year to push alternative financing options deeper into in-store retail sales.

Why this matters: Cash App may make a play for bigger loans like student, personal, auto, and housing loans as its users make more money and grow into new financial life stages.

This should put incumbent banks on notice. Cash App has historically picked up financially marginalized populations and lower-income consumers who use BNPL products for cash-flow assistance. However, as they get older, their financial needs may shift toward bigger goals usually supported by major FIs—positioning Cash App to take share from incumbents for certain loan acquisitions.

Implications for financial providers: Traditional banks can no longer rely on their tenure and institutional trust to net US consumers’ major lending needs. 

With fintechs picking up consumers overlooked by incumbents and doing so earlier in their financial lives, banks must prepare for these new players to make a challenge in the traditional loan market.

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