Jack Dorsey’s Block Challenges Visa and Mastercard With New Cash App Network

The company’s latest initiative, Neighborhoods, lets small businesses create loyalty programs that run directly through Cash App, turning the app into both a wallet and a rewards hub. Customers can pay using their stored balances, earn perks, and redeem them across participating merchants — all without card networks taking a cut.

A Cheaper Way to Pay

To encourage adoption, Block is offering sellers a 1% transaction fee on Cash App payments — far below the roughly 3% that credit cards charge. The firm will also subsidize part of the rewards businesses provide, giving local merchants a Starbucks-style system without the high overhead.

“We’re giving sellers a fairer alternative,” Dorsey said at a Square event in New York, arguing that traditional payment systems have failed small businesses.

The program also ties into a larger strategic play: connecting Square’s payment terminals with Cash App’s 57 million users, creating a unified ecosystem where money moves and stays inside Block’s network.

Building an Alternative Financial Loop

Analysts say the move could give Block an edge over point-of-sale rivals like Toast and Clover, while slowly eroding the dominance of card networks. Still, convincing shoppers to switch from habitual card use will take time.

For Dorsey, however, this is just another phase in his long game — building infrastructure that bypasses legacy finance altogether. Alongside the new payment network, Block has expanded its Bitcoin suite, allowing merchants to accept crypto and even convert a portion of sales into Bitcoin automatically.

With nearly 8,700 BTC on its own balance sheet, Block is among the few public companies treating Bitcoin as both an investment and a payments foundation.

“This isn’t just about cheaper fees,” Dorsey said. “It’s about financial freedom — for sellers, for buyers, and for the system as a whole.”

Source: Bloomberg 

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