Despite market pessimism that the BNPL run was over when interest rates rose, Block pointed to accelerating growth at Afterpay, with $US8.6 billion ($13.1 billion) of sales going through the platform in the fourth quarter, up 25 per cent year-on-year, bringing the 2023 total to $US27 billion – almost double the volumes when the business was sold.
After many Australian investors cashed in on Afterpay’s $39 billion scrip deal, struck at the top of the market in August 2021, it was speculated that Mr Molnar, who reinvented lay-by for the Millennial generation, might slow down to enjoy the spoils.
Afterpay co-founders Anthony Eisen and Nick Molnar back in 2021. Eamon Gallagher
But in an exclusive interview with AFR Weekend, he disputed that and insists he has been continuing to grow Afterpay as he integrates its e-commerce and pay-in-four technology into a larger master and continues to sign up US retailers.
During the two years since he completed the blockbuster sale to what was then known as Square, Mr Molnar has deliberately kept a lower profile. But he says his success has not sapped the impulse to take it to the banking sector.
“I have been working incredibly hard, and I have been doing that as a function of my investment in Block, and what I believe it can achieve,” he said from Los Angeles, where he lives with his family.
He won’t reveal the size of his stake in Block, or how much he took off the table since the deal, but says he is still driven by “a personal desire [to see] Afterpay reach its full potential. I am proud of the growth, and I am very bullish on where we are and the trajectory we are on.”
Mr Dorsey told the market his strategy was to “bank the base” in the US by focusing on getting Cash App onto the smartphones of families and by creating a “social bank” building off its peer-to-peer network effects.
Block head Jack Dorsey: “We are going to move very fast because we have a very focused road map – and against banking in particular.” Tash Sorensen
“Our strategy is to make sure we are the best and first choice, for anyone making under $150,000, to see Cash App as their primary bank,” Mr Dorsey, who also co-founded Twitter (now X) said. “We are going to move very fast because we have a very focused road map – and against banking in particular.”
Afterpay “makes it easy for Cash App to go to market and acquire customers who will choose us as their primary provider of banking services.”
Block shares closed at $117.94, 16.5 per cent higher on Friday.
Cash App does not hold banking licenses but works with partner banks. These include Wells Fargo and Sutton Bank, who provide users with deposit insurance for up to $250,000 of Cash App balances. Cash App is not available in Australia, where the Afterpay brand continues to grow.
With Afterpay being subsumed into Cash App, Mr Molnar hopes the brand he built in Australia over six years as an ASX-listed company will maintain a profile in the US. “It is a verb that describes paying in four. But Cash App has over 50 million monthly actives, and there is a very large portion of them who have not even transacted with Afterpay,” he said.
Having missed the cut at the Sydney Roosters as a junior NRL prospect, Mr Molnar will not be watching the upcoming rugby league showcase in Las Vegas. “I am prioritising skiing with my father, rather than going to the NRL,” he said – although he has been asked to host a social event for the Roosters team.
Echoing the sentiment of former Prime Minister Paul Keating – who on his 80th birthday described Australia as “timid” with a lack of ambition – Mr Molnar said there was no reason for Australia to lack confidence in technology.
“Australia has a great opportunity to be an exporter of technology, and we have proven that talent is world-class and can compete with the best businesses in world,” he said.
“I believe, fundamentally, there is not enough competition in banking in Australia. BNPL was the first industry able to cut through and redefine what competition in the market represents.
“What is best for the banking industry is competition, and more breakthroughs like BNPL. Australia should continue to hold a high bar, and export great technology to the world.”
Like BNPL’s regulatory journey in Australia, Cash App faces growing scrutiny in the US. Last week, NBC reported US financial regulators are exploring allegations by two whistleblowers that Cash App performed inadequate due diligence on customers.
Addressing these issues, Mr Dorsey said: “We are never going to build a perfect system; we can only focus on velocity and speed. And for errors we have had in the past, our goal now is to make sure we correct them quickly, and we continue to build those learnings into the future to stay ten steps ahead of any adversaries.”
Mr Molnar declared: “Afterpay can be a strong on-ramp into a powerful diversified ecosystem.”
