Analyst: Square Cash App Downloads Top Venmo’s

A new report shows that Square’s Cash App downloads increased by 2.2 million last month, while Venmo’s were up 1.7 million.

According to a report from Nomura Instinet analyst Dan Dolev, the data also shows a slowdown in Venmo’s user acquisition. While year-over-year growth for Venmo still beats the Cash App at 35 percent versus 19 percent, the growth in new mobile payments app downloads of Venmo has slowed down, compared to increases of 54 percent in April, 47 percent in March and 44 percent in February.

But while Square’s Cash App has shown significant growth, it will take time to catch up to Venmo, said Cornerstone Advisors senior director Tony DeSanctis. “I think the bottom line is that the download number is a function of growth rate since Square is so much smaller,” he said, according to Bank Innovation.

In addition, Moshe Katri, managing director of equity research at Wedbush Securities, said a better measure is PayPal’s success in beginning to monetize the mobile payments app. PayPal has said that Venmo is expected to generate $300 million in revenue this year.

“The bigger story is how quickly PayPal has been able to monetize Venmo,” Katri said. “The Square Cash App can have 10 times the number of downloads of Venmo, but what’s really important is how you’re monetizing the user base. Venmo could become a billion dollar business for PayPal.”

In April PayPal CEO Dan Schulman released Venmo’s user numbers for the first time: 40 million active monthly users, defined as a person whose used the service once in 12 months.

Venmo continues its significant momentum,” Schulman said at the time. “As user growth continues to accelerate, merchants are increasingly turning to Venmo as a way to attract a valuable and engaged consumer base.”

Shulman and Chief Operating Officer Bill Ready also pointed to Venmo’s growth, not only as a P2P payment network, but also as a payment method for its customer base — as well as partnerships made with Chipotle, Grubhub and Uber, among other merchants.