Block's Cash App BNPL Feature Gains Momentum, Expected to Boost EPS Growth

Block's Cash App has introduced a post-purchase BNPL feature, allowing users to convert recent purchases into installment plans. This feature has gained popularity since its launch in February and is expected to boost earnings over the next two years, according to UBS.

Block's (NYSE:XYZ) Cash App has introduced a post-purchase buy-now, pay-later (BNPL) feature, allowing users to convert recent purchases into installment plans. This feature, launched in February, has quickly gained popularity and is expected to boost earnings over the next two years, according to UBS research analyst Timothy Chiodo Block’s Cash App post-purchase BNPL is gaining steam, could lift EPS growth: UBS^[1].

The post-purchase BNPL feature, powered by Afterpay, is already outperforming Cash App Borrow at a similar stage of rollout, with better attach and loss rates, UBS reported on October 10 Block’s Cash App post-purchase BNPL is gaining steam, could lift EPS growth: UBS^[1]. As adoption widens, the bank sees the product driving higher Cash App Card spend, growing the base of "primary banking" users, and boosting monetization.

By July 2025, post-purchase BNPL reached an annualized run-rate of roughly $2 billion, with more than 1 million users as of the same month Block’s Cash App post-purchase BNPL is gaining steam, could lift EPS growth: UBS^[1]. The feature is currently available to a subset of roughly 26 million Cash Card users and not yet in every U.S. state. UBS estimates that the most readily addressable cohort is about 8 million "banking active" Cash App users, representing about half of Cash Card spend.

UBS's model suggests post-purchase BNPL could add a mid-single- to high-single-digit (MSD–HSD) percentage to EPS growth in 2026 and 2027. At the Cash App segment level, the firm sees a MSD% contribution to reported gross profit growth in those years. On a total-company basis, UBS translates that to a low-single-digit gross profit growth contribution.

The post-purchase BNPL feature generates revenue from debit interchange (about 1.6%) and a flat consumer financing fee (standardized at 7.5%) Block’s Cash App post-purchase BNPL is gaining steam, could lift EPS growth: UBS^[1]. Costs and losses are modest, with loss rates tracking slightly above roughly 3% today. UBS expects improvement as the underwriting model scales.

UBS reiterates a $95 price target for Block, rolling its valuation to 2027 and shifting to a ~21x P/E on Adjusted EPS. This target implies ~15x Adjusted EBIT on UBS's prior framework.

Beyond Cash App, UBS continues to see improving trends at Square, citing expanded field sales hiring and new distribution partnerships that could add about 200 bps to GPV growth in 2026 and about 400 basis points in 2027 from field sales alone.

UBS will host an investor/industry panel on modern POS competition in San Francisco on November 18, the evening before Block's investor day.