Bitcoin Updates: Square's Expansion into Bitcoin Threatens U.S. Bancorp's Leading Position in Payments

Jack Dorsey's Square, now an integral part of

Inc., has broadened its Bitcoin payment services to reach more than four million businesses, representing a significant milestone in the mainstream acceptance of cryptocurrency. Announced in November 2025, this launch utilizes the Bitcoin Lightning Network, allowing customers to make instant, low-fee payments by scanning a QR code at checkout . Business owners have the option to either keep their payments in Bitcoin or have them automatically converted to U.S. dollars, with Square managing the exchange rates and settlements. Until the end of 2026, Square will not charge any transaction fees for Bitcoin payments; after that, a 1% fee will be introduced, which remains below the standard 2.5%–3.5% credit card processing charges .

This initiative supports Square's larger ambition to lead in the small and mid-sized business sector. In the third quarter of 2025, Square reported a 12% year-over-year increase in gross payment volume (GPV), reaching $67.2 billion, with international business growing by 26% compared to 8.9% in the U.S.

. The company has raised its full-year 2025 gross profit forecast to $10.243 billion, reflecting robust uptake of its integrated software platform, which on average lifts user sales by 9% . Square also saw a 14% increase in hardware revenue in 2025, driven by enhanced point-of-sale devices and mobile payment readers.

Square’s integration of Bitcoin builds upon its reputation for pioneering merchant solutions. The "Square Handheld," introduced in 2025, merges mobile and in-store operations, while streamlined subscription tiers (Free, Plus, Premium) make its software suite more accessible

. The company’s growth in international payments is particularly visible in regions like the UK and Australia, where cross-border transaction volumes climbed 15% in 2025 .

Experts in the industry see Square’s Bitcoin initiative as a calculated response to rivals such as PayPal and U.S. Bancorp, both of which are making significant investments in digital payment technology. U.S. Bancorp, for example, recently noted that payments now account for 26% of its revenue, highlighting ongoing infrastructure improvements and marketing efforts to maintain its market position

. At the same time, Square’s Net Promoter Score (NPS) of 48 in 2025—far surpassing PayPal’s 31—demonstrates its strong merchant loyalty .

Importantly, Square’s Bitcoin functionality addresses ongoing doubts about the real-world utility of cryptocurrencies. By leveraging the Lightning Network, Square overcomes scalability issues, offering nearly instant payments with very low fees. This is a notable improvement over traditional blockchain systems, which often face delays and higher costs. Allowing merchants to hold Bitcoin also caters to the increasing interest in digital assets among small businesses, especially in tech-forward industries like e-commerce and fintech.

Square’s growth mirrors larger movements in the global fintech sector, valued at $394.88 billion, with North America accounting for 34% of the market

. With 70% of Square’s GPV generated by small and medium enterprises, its emphasis on cost-effectiveness and simplicity positions it to win market share from traditional payment processors. The 2025 data also highlights Square’s leadership in the U.S. merchant-acquiring market, where it serves the largest number of merchants .

As Bitcoin becomes more widely used, Square’s strategy may prompt established banks to speed up their own cryptocurrency initiatives. U.S. Bancorp, for instance, handles close to $1 trillion in annual purchase volume but now faces mounting competition from fintech companies that prioritize digital solutions

. Square’s integration of hardware, software, and financial services into a unified platform gives it a distinct advantage in a rapidly evolving market.