For the second blog in CI’s series on financial super apps, we delve deeper into the space by examining two of the more aggressive startups looking to establish dominant apps within the U.S. market: Cash App and M1 Finance.

Cash App—founded in 2013 by Twitter founder Jack Dorsey as a P2P payments app and currently available in the U.S. and UK markets—harbors truly considerable ambitions as it seeks to establish itself across several financial services industry verticals. After a successful P2P payment product launch, the firm moved first into consumer banking with a debit card, and then into investing with both stocks/ETFs and Bitcoin; the firm has since progressed into services (as opposed to products) with its recent launch of free tax filing. Befitting its ambition, the firm promotes itself as “The easiest way to send, spend, bank and invest.”

This screenshot shows Cash App's public site homepage
Public Site Cash App Homepage

The majority of Cash App’s products and services are free to clients, but the firm charges a 1.5% fee for instant withdrawals, in comparison with an otherwise three-to-five business day wait time. Cash App’s revenue streams also include Cash Card transactions, where the firm charges businesses 2.75% for accepting the card, and ATM withdrawal fees. Like other brokerages, the firm also generates revenue in the form of net interest income by loaning out clients’ deposits. Cash App stated that in fiscal year 2021 it generated approximately $2.07 billion in gross profits.

Cash App is poised to continue adding features at a rapid pace and its especially large userbase—currently estimated at over 70 million—means that even if only a fraction of these active clients begin adopting its newer services, the firm could gain significant momentum and pose a meaningful threat to the standard incumbent brokerage business model.

Turning to M1 Finance, this firm—founded in 2015 by Brian Barnes—stands out for its innovative, easy-to-use investment portfolio capabilities. The firm began as a robo-advisor and now offers banking capabilities, including digital checking accounts and lines of credit. The firm launched a credit card in September 2021 and recently announced that it will begin offering crypto investing. The firm, which trademarked the term The Finance Super App, markets itself as a platform where customers can invest, spend and borrow in one place.

This screenshot shows M1 Finance's public site homepage
Public Site M1 Finance Homepage

M1 Finance offers a two-tier subscription model: a basic free membership and a premium membership the firm calls Plus. The Plus membership includes extra benefits like the ability to set up custodial accounts, AM/PM trading windows and 3.5% to 5% interest on portfolio borrowing. The firm currently has 500,000 Plus members and $5 billion in assets under management, though they do not publicly disclose their total number of users. Like other brokerages, net interest income represents a primary revenue stream for the firm.

M1 Finance’s expanding variety of financial offerings in multiple verticals puts it squarely on the path to become a super app. Its best-in-class customizable portfolios offerings—convenient to new investors looking for simplicity in a market saturated by brokerage startups—provides the firm an edge it can use to distinguish itself from competitors.

For even more in-depth coverage of these financial super app startups, see CI’s recent Broker Monitor report on startups in the brokerage landscape (Broker Monitor subscription required). See also our Insights page for additional research on the state of the brokerage industry and learn more about how our research services can help your organization.

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Sam Marlowe