Square’s peer-to-peer (P2P) payments service called Cash App is offering users short-term loans in order to test a new feature. As reported by TechCrunch on August 12, 2020, Cash App has selected around 1,000 users at the moment for testing this feature. However, the app intends to make this feature broadly available to many people so that they may be able to use the money.
Cash App is offering $20 to $200 in short-term loans
The P2P payments service of the company Square is considering offering users a new way to get loans for a short-term period. Before expanding this feature on a wider scale, the app has planned to test it first and therefore it is limited only to one thousand users who are allowed to get loans initially. As soon as the feature is tested successfully, it will be widely available to many people.
Currently, the selected users are allowed to get short-term loans in the range between $20 and $200. They cannot borrow up money more than this specified limit at the moment. Once users will get loans, the app will give them a deadline of four weeks during which they have to pay their loans back. They will also have to pay a flat fee of around 5% on their loans.
Users are required to pay back their loans within a specific period of time and if they don’t return loans during this time, the app will provide them an extra one-week grace period. After that, it will begin to include a 1.25% interest with each passing week. Apart from this, the app will not provide any extra loans to those users who fail to pay back on time.
A spokesperson from the company Square said that they are looking forward to knowing users’ response and their experience regarding this new feature. The spokesperson said:
“We are always testing new features in Cash App, and recently began testing the ability to borrow money with about 1,000 Cash App customers. We look forward to hearing their feedback and learning from this experiment.”