Jack Dorsey may “love” bitcoin but it looks like Square needs a better margin on it regardless.
Square’s Cash App has started charging fees of as much as 1.76 percent on bitcoin purchases, sources have pointed out to CoinDesk.
The Cash App’s support website now acknowledge fees, writing:
“Cash App may charge a fee when you buy or sell bitcoin. If so, the fee will be listed on the trade confirmation before you complete a transaction.”
It is unclear when that language was added but there were no fees associated with bitcoin purchases as recently as September.
According to the Internet Archive, the same “Fees” page said on March 8, 2019: “You are not charged a conversion fee, or any other fees, to buy or sell Bitcoin through the Cash App.”
One screenshot of a purchase page dated Nov. 5 showed a $0.10 fee for a $10 purchase (1 percent). We also saw $0.88 for a $50 purchase (1.76 percent) and $1.75 for a $100 purchase (1.75 percent). It seems that Square rounds down in certain instances.
Square did not immediately reply to a request for comment from CoinDesk. It is unclear if the fees have rolled out to all users but CoinDesk has verified the existence of the fees on four different accounts.
Nevertheless, the fees compare favorably with Coinbase for smaller BTC purchases. The leading crypto-first startup has variable fees based on the size of the transaction with fees starting at $0.99 for any purchase below $10. A $10 transaction on Coinbase incurs a $1.49 fee. At $50 to $200 the fee is $2.99. With a flat 1.49 percent fee for larger purchases, Coinbase becomes a better option above roughly $171, according to our tests.
All those fees certainly add up: Coinbase CEO Brian Armstrong announced last month the company has earned more than $2 billion in transaction fee revenue since launching in 2012.
Square recently announced it would enable purchases of equities in the Cash App, and confirmed to The Verge there would be no fees for stock purchases.
Square processed $125 million in bitcoin sales through its Cash App in the second quarter of 2019, nearly doubling a record first quarter. However, Q2’s bitcoin sales only generated $2 million of gross profit for the company.
Square has its Q3 earnings call later today. CoinDesk will update this piece as needed.
Jack Dorsey image via Shutterstock