The Fintech Cash app reaches customers through its own clothing line.

• Cash App launched a new clothing brand, Cash by Cash App, during the pandemic.
• The payment operator has launched three different collections, with plans for a fourth in October.
• The race is on to capture customers as startups compete to be the best financial app.

Cash App equips its customers to increase brand loyalty as it looks to compete in an increasingly competitive financial app landscape.

Businesses usually opt for practical items like t-shirts and baseball caps for their loyal customer base. But there are always a handful who deviate from the usual so-called swag in hopes of leaving a more lasting impression—think of the legendary Wall Street banker bag that has fallen in and out of trend with young Wall Streeters over the past four decades.

Cash App, the personal finance app that is a subsidiary of payments giant Block, is looking to do just that. In an effort to stand out in a crowded payments market, Cash App launched a fashion brand, Cash by Cash App, in 2020.

The line originally offered athleisure styling in the midst of the pandemic. Then, last November, Cash App worked with rapper Megan Thee Stallion on the outside, limited edition collection that Liang Shi, Cash by Cash App manager, said sold out of the few hundred units created. In April, Cash App followed that with the Future Nature collection, its second own line.

Now the company is working with an as-yet-unnamed exterior designer on its fourth collection to be released in October.

“For us, a big part of our brand ethos has long been around empowering financial independence, creativity and self-expression,” Catherine Ferdon, Cash App’s head of marketing and brand, told Insider. “We recognize that fashion is actually another important medium for self-expression.”

Block leaders have been vocal about their desire to see Cash App become the super app for consumers. But the race to super-app stardom for many fintechs is intensely competitive. Consumers can turn to new digital offerings from incumbents like JPMorgan and Goldman Sachs, upstarts turned financial giants like SoFi or PayPal, and even firms without a traditional background in banking, like Walmart.

The crowded market has placed even greater emphasis on how apps go about acquiring new customers. And while traditional marketing and advertising spending remains a mainstay for most, some fintechs have gotten creative in how they attract people, from producing original content, like podcasts or newsletters, to high-profile partnerships with influencers.

Some experts say that using non-traditional approaches to advertising can end up paying off in a big way.

“The most important marketing tool today is word of mouth and word of mouth,” Allen Adamson, co-founder and managing partner of marketing firm Metaforce, told Insider. “People share images more than words, and getting your marketing out of the rational world of ‘Let’s explain why this app is easy to use’ and into the emotional world is what it takes to break out.”

Trevor Williams, senior vice president of payments and fintech equities at Jefferies, told Insider that he believes Block is unique among the scaled fintech companies in targeting younger users and believes it’s a “smart way” to engage with consumers before they establish a bank. compared to a traditional financial institution.

It positions “Blocks to potentially increase the mix of users over time who use the Cash App as their primary bank account,” Williams said.

Block is focused on how it budgets for marketing

Cash App’s launch of a third fashion line comes as Block executives take a closer look at how to market themselves during a tough economic period.

Block’s chief financial officer Amrita Ahuja said in August that the company plans to reduce spending on planned operating expenses by $250 million for the rest of the year. “We pulled back on experimental and less effective go-to-market spending, adjusted risk loss estimates based on more current trends, and slowed our hiring pace,” Ahuja told analysts on Block’s second-quarter earnings call.

But Ferdon told Insider that Cash App is “eager to invest” in the line.

“Money is intrinsic to lifestyle and the next generation feels this and they expect their bank to understand that about them,” Ferdon said. “Very core to our strategy at Cash App is to make sure we recognize that and emphasize that.”

While Cash App declined to specify the amount it has spent on developing its apparel efforts, parent company Block’s financials provide a glimpse into marketing and branding spending.

In the second quarter, Block spent $531 million on sales and marketing across all of its businesses — which now include Square, Cash App, Afterpay and music streaming service Tidal — a 42% year-over-year increase.

Cash App represents a significant source of income for Block. Cash App first launched in 2013 and brought in roughly $705 million in gross profit in the second quarter — nearly half of Block’s total.

Cash App’s investments in closing the loop

Prices for items in the Cash by Cash App line range from about $20 for a t-shirt to $200 for a raincoat. All proceeds from the last two fundraisers have gone to charity, not-for-profit organizations such as the Power Shift Network, a group of climate and social justice organizations.

A best seller from the Future Nature line has been a bomber jacket, emblazoned on the outside with a bitcoin “B” and embroidered on the inside with the table of contents from Satoshi Nakamoto’s original bitcoin whitepaper.

But the most popular choices have been t-shirts and hoodies, according to Shi. Former Victoria Secret model Elsa Hosk was reportedly spotted wearing a black Cash by Cash App hoodie from the company’s first collection. Both Shi and Ferdon refused to specify how many items in total had been sold.

It’s not just about marketing. Dan Dolev, senior analyst and fintech equity researcher at Mizuho Securities, told the Wall Street Journal in 2020 that the availability of Cash by Cash App apparel for purchase through the company’s app — and the fact that Cash App customers receive a 25% discount for doing so — “may be a test for a closed-loop e-commerce checkout.”

Insider previously reported that Cash App has focused on owning more of the payment rails used by merchants, keeping both businesses and consumers within the Block ecosystem instead of relying on traditional networks like Visa and Mastercard. Closing that loop, experts said at the time, would mean Cash App would not have to pay fees to established financial players.

Cash App’s Ferdon said Cash by Cash App “is pretty well integrated” into the company’s broader payments “ecosystem.”

“As you move forward, you’ll see these integration points get even closer,” Ferdon added.