Owned by Block (the fintech company formerly known as Square), Cash App allows users to send and receive money virtually, make online and in-person payments, and invest in stocks and cryptocurrencies. It’s best known for its peer-to-peer payment functionality, which rivals major players like Venmo and PayPal.
If you are planning to use Cash App for any of these purposes, there are a few things you need to know. Below, you’ll find an in-depth review of the service, including how it works and how to open an account.
What is the Cash app?
The Cash app was launched in 2013, providing users with a convenient way to send and receive money, without going through a bank or transfer service. In the years that followed, it expanded its offering and now provides other services such as Cash App-connected debit cards, direct deposit support, and an investment platform. Users also have access to cashback offers (called “Boosts”) from retailers and restaurants like McDonald’s, Walgreens, Walmart, and Whole Foods.
As its name suggests, Cash App is above all a smartphone application (available on the App Store and Google Play). It is also accessible through browsers like Chrome and Safari.
How does the Cash app work?
The platform allows customers to pay or request money from other users who have connected a bank account, credit card or debit card. Prepaid cards can also be used to add money to Cash App, but you cannot transfer your Cash App balance to a prepaid card.
In many ways, Cash App works like a traditional bank account. Once registered, you will get an account number and a routing number. So you can deposit money, set up direct deposit with your employer, and get a debit card (called a “payment card”). However, it is important to note that Cash App is a financial platform and not a bank. The company partners with banks to provide banking services (like issuing debit cards and setting up direct deposits).
When you’re ready to transfer money from Cash App to your bank account, you can initiate a deposit through the app or your browser. Standard deposits are free and usually take two to three days to process, while instant deposits come with a fee of 0.5% to 1.75% (minimum $0.25) and arrive immediately in your bank account .
If you prefer to pay for goods and services using your Cash App balance, you can do so using your Cash Card, both online and in physical stores. Or, if you’re buying from a merchant who uses Square, you can open Cash App and scan the QR code on their POS system or website.
How do I open a Cash App account?
No matter how you want to use Cash App, your first step is to create an account. You will be prompted to link your bank account (either using your debit card or using your routing and account numbers) during this process. Next, you’ll need to create a unique username (called “$Cashtag”), which allows other users to find you and send or request funds.
From there, you can initiate payments, deposit money, and withdraw your balance to your traditional bank account. If you have a Cash Card, you can use it to withdraw cash from ATMs and make mobile payments with Apple Pay or Google Pay.
You can also use your Cash App account to buy stocks and Bitcoins. If you are feeling very generous, you can even send shares to your loved ones as a gift.
Can you send money abroad with Cash App?
With Cash App you can send money to users in the US and UK. If you send funds from the US to the UK, the company will automatically convert the money from USD to GBP (based on the current mid-market exchange rate).
Does Cash App allow you to withdraw cash from ATMs?
Yes, if you request a debit card with your Cash App account. Some fees may apply (more on this below).
What are the fees charged by Cash App?
If you have a debit card or bank account linked to your Cash app, you won’t pay any fees to receive or send money. But if you send money with a credit card, there is a 3% fee per transaction.
Cash App charges $2 per ATM withdrawal made with a cash card (in addition to fees charged by the ATM owner). However, if you received at least $300 in direct deposit payments into your account, the company will refund three ATM fees per 31 days (up to $7 per withdrawal).
There is no cost to use the investment component of the Cash App platform, but you may be charged a small fee when buying or selling Bitcoin.
Can businesses use Cash App?
If you’re a small business owner, you can use Cash for Business to accept payments and instantly deposit them into your bank account for free. However, the company charges certain fees for the service, including 2.5% per transaction and 2.75% for each payment made by credit card.
Is the Cash app secure?
Cash App is PCI Data Security Standard Level 1 (PCI-DSS) compliant, which is the highest level of security compliance for merchants processing payments. As a customer, this means that your data is encrypted and secure.
You can enhance the security of your Cash App account by setting up two-factor authentication, requiring a PIN to transfer funds, and enabling notifications for account activity. If your card is lost or stolen, you can deactivate it to avoid fraudulent charges.
What are the alternatives to Cash App?
When it comes to Cash App’s core functionality (peer-to-peer money transfers), the company’s main competitors are Venmo, Zelle, and PayPal. Here’s how it compares to each of these services:
Venmo: For the most part, this PayPal-owned app is quite similar to Cash App. Both platforms allow users to pay and request money from others, use a debit card, set up direct deposit, and make online and in-store payments. However, Venmo offers social media-like features (such as likes and payment comments) and purchase protection, but it’s only available in the US.
Zelle: Zelle works directly with major banks (including Chase, Wells Fargo, and Bank of America) to process same-day payments between its users. If you do business with one of its partners, you can make payments directly from your online banking account, so there is no need to download the Zelle app.
PayPal: Established nearly 25 years ago, PayPal rules the online payment space. It includes a lot more bells and whistles than Cash App, including the ability to make international payments, create and send professional invoices, and pay for purchases in installments.