Square bitcoin payments merchants 2025 reached a landmark this week as Block, Inc. (NYSE: XYZ) confirmed that more than one million U.S. merchants on the Square platform are now enabled to accept Bitcoin through the Lightning Network. The activation happened through an automatic rollout for eligible sellers, with the company reporting that new businesses were being switched on at a rate of roughly one every eight seconds at the peak of the deployment. Customers pay in Bitcoin while merchants receive U.S. dollars by default, insulating sellers from price volatility at the point of sale. Block is trading at $70.49 per share.
Square Bitcoin Merchant Rollout: What Happened
The mechanics of the rollout are straightforward but worth unpacking for any financial institution that competes in small-business payments.Square is offering zero processing fees on Bitcoin transactions through 2026, near-instant settlement via the Lightning Network, and no traditional chargeback exposure. Sellers can settle in dollars or retain the Bitcoin, and eligible merchants can separately convert up to 50 percent of their eligible daily sales revenue into Bitcoin through the Square Dashboard. A shopper pays from any Lightning-enabled wallet, including Cash App, and the merchant sees the transaction in standard Square reporting, denominated in dollars and marked as a Bitcoin payment. Bitcoin Product Lead Miles Suter has described the push as an effort to make Bitcoin "circulate" rather than sit passively, framing point-of-sale use as central to Block's long-term payments thesis. Square first outlined the payment push at Bitcoin 2025 in Las Vegas, and the one-million-merchant figure represents the first large-scale proof point since that announcement. The full source reporting is available through Finnhub's news feed.
Zero-Fee Processing and the Small-Business Payment Stack
For credit unions that operate merchant acquiring programs or that serve small-business members with payment processing referrals, the zero-fee structure is the most operationally significant detail in the announcement. Traditional card interchange and processing fees represent real revenue for acquiring banks and credit unions, and any durable shift in transaction volume toward a zero-fee rail reduces that base. Square is not asking merchants to do anything new: the Bitcoin option sits inside infrastructure those businesses already use, requires no separate crypto account setup, and is presented as a line item inside familiar Square reporting. That low-friction design is what makes the competitive read more serious than a standalone crypto app would be. Credit unions that have historically competed on relationship and simplicity with small-business members now face a payments feature that is also simple, already installed, and priced at zero. The question is not whether Bitcoin payments will immediately displace card volume. The question is whether a sustained zero-fee alternative, embedded in the dominant small-business point-of-sale platform, erodes the perceived value of credit union merchant services over time. This dynamic mirrors earlier displacement patterns explored in our reporting on how credit unions lost ground in underserved markets to non-bank providers.
What it means for credit unions and merchant services strategy
What it means for credit unions is most acute for institutions in the $500 million to $2 billion asset range that have invested in merchant acquiring or that bundle payment processing as part of a small-business banking relationship. These credit unions face a specific exposure: their merchant members may not switch entirely, but they may route a growing share of transactions through Square's Bitcoin rail, particularly for customer segments that are younger or more likely to hold Bitcoin in Cash App. NCUA supervisory guidance on digital assets has been cautious but not prohibitive, and credit unions exploring a response have regulatory room to evaluate Bitcoin-related merchant services products, though any program touching crypto custody or conversion would require a careful NCUA non-objection or legal review before launch. The more immediate action is retention-focused: credit unions should audit which of their small-business members are already on Square, assess fee structures that may be vulnerable to a zero-cost competitor, and consider whether their business banking value proposition extends clearly beyond payments. Institutions that have built deep employer-group and community relationships, like those profiled in our ongoing CU Spotlight series on Electric Cooperatives, often have a retention buffer that pure payments providers cannot replicate.
What we're watching
- Block Q2 2025 earnings (expected August 2025): Transaction volume data on Bitcoin payments through Square will be the first real signal on merchant uptake versus activation. Watch for any reported share of gross payment volume running on the Lightning Network rail.Zero-fee expiration in 2026: Block has not disclosed what fee structure follows the promotional period. Any pricing announcement before December 2026 will clarify whether this is a permanent competitive repositioning or a customer-acquisition subsidy.
- NCUA guidance on digital asset merchant services: The agency has issued letters on credit union digital asset activity, but no specific guidance addresses Bitcoin point-of-sale acquiring. A formal interpretation request or supervisory letter in 2025 or 2026 would materially change what credit unions can offer.
- Cash App Lightning Network integration depth: Cash App is Block's consumer wallet and the most natural payment source for Square merchants receiving Bitcoin. Any reported figure on monthly Lightning-enabled Cash App users would set a ceiling on realistic transaction volume for the near term.