The Little White Square That Could
The founding story of Square is a classic startup legend. In 2009, co-founder Jim McKelvey, a glass artist, lost a significant sale because he couldn't accept a credit card. He brought the problem to his friend, Twitter co-founder Jack Dorsey, and together
they created a revolutionary solution: a tiny, square-shaped dongle that plugged into a smartphone's headphone jack, turning it into a point-of-sale terminal. This simple device democratized commerce, allowing small merchants, from artisans to food truck owners, to finally participate in the digital economy. For years, this was Square's identity—a champion for small businesses, providing them with tools for payment processing, sales tracking, and even small business loans. The business was successful, but it was also a tough, low-margin game in a crowded field.
A Billion-Dollar 'Hack Week' Project
The single decision that redefined the company's trajectory wasn't a pivot away from its merchant business but the launch of something entirely new. In 2013, born from a company hackathon, a peer-to-peer payment service initially called Square Cash was launched. It was a simple tool for individuals to send money to each other. For a long time, it was seen as a side project, an experiment that was losing the company money. According to Dorsey, many inside the company wanted to shut it down. It was a strategic departure from the core business of serving sellers, and its path to profitability was unclear. While the Square side of the business focused on merchants, this fledgling consumer app, soon rebranded as Cash App, was quietly building a user base by solving a different problem.
From Simple Payments to a Financial Super-App
The decision to not only launch but to protect and invest in Cash App proved to be visionary. The app began to evolve far beyond simple peer-to-peer transfers. It added a debit card (the Cash Card), direct deposits, and a “Boost” rewards program. Then came the masterstroke: adding the ability to buy and sell Bitcoin in 2017 and, later, fractional shares of stock. These features transformed Cash App from a utility into an all-in-one financial hub, especially for a younger demographic and those underserved by traditional banks. It became a cultural phenomenon, name-dropped in hip-hop songs and used for massive social media giveaways, driving viral growth that marketing dollars alone couldn't buy. The app's gross profit began to grow exponentially, far outpacing the original Square merchant services.
How One App Reshaped an Entire Company
Today, under the parent name Block, Inc., the company operates two massive ecosystems: Square for merchants and Cash App for consumers. But a look at the financials reveals the monumental impact of that one decision. As of late 2026, Block's market capitalization sits around $47 billion. A huge portion of that valuation is driven by Cash App, which now frequently contributes around half of the company's entire gross profit. In some quarters, Cash App's gross profit growth has been double that of the Square seller business. The company that started by empowering small businesses now finds its primary growth engine and value in a consumer-facing app that was once an expensive, controversial side project. The integration is now coming full circle, with merchants able to accept payments directly via Cash App Pay, bridging the two ecosystems.
