For people who want to dip their toes in the stock market, Square is introducing a new feature for it’s Cash app to aid their efforts. Cash app, earlier known as Square Cash, is a mobile payment service by Square Inc, a company based in California, which allows users to transfer money to one another.
The company is launching different features to help its users get in touch with different investment options. Square introduced a feature last year which allowed users to buy and sell bitcoins via their phones, and now Square is introducing another one of its features which will allow its users to buy and sell stocks via the Cash app. The feature is a good start for people who wants to start investing in stocks but do not have to lose money as the feature allows the users to buy stocks for as little as $1.
The statement should not be confused with buying the entire stock for $1. The Cash app’s feature will allow users to buy a fraction of the stock instead of the whole.
To further explain the stock feature, Dorsey gave an example on Twitter on Thursday that users can buy $1 worth of a stock like Berkshire Hathaway class A shares, currently trading at more than $315,000. “Really proud of the team for making buying stocks and building wealth accessible to more people,” Jack Dorsey, the co-founder of Square Twitted on Thursday in appreciation of his employees.
Square also became one of the competitors of Robinhood by declaring that they won’t be charging users for buying stocks. Although Robinhood currently does not give the option of fractional stocks, the company is all set to join the race soon. The company has advised the interested users to keep an eye out for the free stock feature as it would be coming to the apps soon and as for the brokerage services, they will be done in-house through Cash App Investing LLC.
The concept of the fractional share being fairly new is already adapted by some investment apps such as Stockpile and Betterment while other investment giants such as Charles Schwab are aiming to adopt the concept.
Square also took it upon its shoulders to teach people about the risks related to investing and released a simple guide to aid the new players trying to join in the game. The company is also known for providing the users with small business loans via Square Capital and is currently working on a bank charter in Utah to allow customers to make deposits.
Instead of generating more and more revenues, Square’s main focus is to make customers store their money and increase the usage of their associate debit cards so that Square can collect the transaction fee from the back end.
According to Square, Cash App has almost 15 million monthly active users and features like buying and selling bitcoins, and free stocks are an attempt to attract the younger percentage towards the app and open up new gateways to building up wealth.