The news: Block’s Neighborhoods added 30,000 Square sellers to the platform, a tenfold increase in new merchants since June, per a press release.

Block did not disclose how many Cash App users have opted into the platform.

How we got here: Cash App launched Neighborhoods in October of last year, part of its effort to fuse Square and Cash App into a two-sided network.

To fuel Neighborhood’s growth, Block has turned to sponsored incentives and increased merchant visibility:

• Consumers can earn 10% cash back in the form of Local Cash, funded by Cash App. (After the promo, Local Cash is funded by participating merchants.) This cash is redeemable at any Neighborhood seller.
• Onboarded merchants are also flagged on Cash App’s in-app map within the Neighborhoods tab for easy search and discovery.
• Cash App consumers can “follow” a business in Neighborhoods to receive personalized deals from merchants.
• Participating Square merchants benefit from lower 1% processing fees from Cash App users' orders.

Customers can earn and redeem Local Cash by ordering within the Cash App mobile app. For in-person transactions, users have to scan a QR code at the merchant’s point-of-sale. 

Zooming out: While business lead Owen Jennings framed Neighborhoods as one of Block’s “biggest drivers” of growth, per Block’s Q2 2026 earnings call, scaling the program will take time.

Even with auto-enrolling new sellers, 30,000 sign-ups make up less than 0.67% of Square’s more than 4.5 million sellers in two months, per Block’s most recent 10-K.

Slow merchant enrollment suggests that some sellers may have hesitations about joining the network. Local Cash can be earned and redeemed at any merchant, which could put merchants on the hook to fund rewards that were earned across a host of other local businesses.

Merchants can set their own redemption rates, but if too many merchants keep their rate low for fear of getting stuck with an outsize rewards bill, consumers may not find much value in the rewards, especially compared with credit card rewards that can be earned anywhere—further eroding the value proposition for merchants to join in the first place.

Implication for payment providers: POS providers that serve small businesses and micro-businesses like farmers market vendors are in a unique position to build network programs that improve merchant visibility and draw in new customers. 

Helping those businesses set up their own rewards programs—with points tracking and email/text offers—can go a long way to improve merchant and customer satisfaction. But novel schemes like centralized rewards systems may be too off-putting for small businesses that already operate on tight margins.

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