Cash App is launching a “magic wand” for payments, inspired by a social media trend in which people posted videos of themselves paying for items with homemade wands embedded with tap-to-pay cards. But the company’s strategy appears to extend beyond a viral gimmick.
The $25 wand is part of Cash App’s new lineup of NFC-enabled payment tags, with additional form factors expected in the coming months. The tags link to a Cash App Card and work like a debit card anywhere Visa tap-to-pay is accepted.
The wand includes a keychain ring that can be attached to a bag or clothing. Users can activate the tag by linking it to the Cash App app, and there’s no minimum balance required to use it.
The Cool Kids Market
Digital wallets and NFC-enabled wearables already allow consumers to make payments using devices such as smartwatches and smart rings. Those products are typically linked to debit or credit cards through a digital wallet. Cash App says its tags could be useful in phone-free environments such as music festivals and other live events.
Still, the novelty of paying with a wand may be part of the appeal, particularly among younger consumers. The wand may also serve as an entry point for a broader range of payment accessories the company plans to introduce.
“The cool kids will want to have one, and the only way to get it and use it is to purchase things with Cash App,” said Don Apgar, Director of Merchant Payments at Javelin Strategy & Research. “The innovation here is riding the trend wave of wand payments as a way to introduce NFC capabilities to their platform and leveraging it as a marketing tool to acquire new users and make existing users more transactional.”
“Even if the wand fad has a short cycle, if Cash App can exploit it to change customer behavior in their favor, it will be a winner for them over the long term,” he said.
Basic Technology
Cash App Tags will eventually be available in an array of physical formats. The company plans to release limited-edition designs in the coming weeks ahead of a wider rollout later this summer. While the branding and form factors are new, the underlying NFC payment technology is well established.
“ExxonMobil had the SpeedPass for your keychain—a small fob linked to your credit card that you could wave at the pump,” said Apgar. “This is all about customer acquisition through marketing buzz with the hopes of adding new users and making existing users more transactional.”
