US fintech Block set to close European payments app Verse
San Francisco-based payments company Block is to shutter some of its European business operations in favour of “areas that have a higher potential return on investment”.
Block closes some European businesses
The closures are to extend to its peer-to-peer (P2P) payment app Verse in the European Union and its buy now, pay later (BNPL) platform Clearpay, which is to cease operations in Italy, France and Spain.
A note on the Verse website reads that the app will remain available until 13 September, at which point it will be deactivated and removed from app stores and devices.
Block’s founder and CEO Jack Dorsey, former CEO and co-founder of Twitter, confirmed the news during the company’s Q2 2023 earnings call this month.
He said the two businesses required “significant investment” but that both had ultimately failed to generate the profitability that Block was expecting.
“We see an opportunity to shift these resources toward strategic areas that have a higher potential return on investment, and we continue to drive toward our goal,” Dorsey added.
Block acquired Verse for its mobile payment service Cash App over three years ago with the ambition of boosting its presence in the European payments market.
It followed this by acquiring Australian fintech Afterpay and its European epithet Clearpay, which was completed in January 2022.
Despite Cash App having 54 million monthly users as of June and expecting a 27% year-on-year growth in gross profits in July, Dorsey informed analysts on the call of Block’s decision to reduce its brand spending and participation in “more experimental channels” in favour of “channels with more proven returns”.
Amrita Ahuja, Block’s chief financial officer, added that this shift in spending allowed it to identify cost savings in other areas of the business, including corporate overhead spending.
In addition to scaling back the two businesses, Ahuja confirmed that it was also “downsizing our real estate footprint across some of our West Coast office locations” as part of its action to recover the items’ $132 million operating losses in the second quarter.
