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Peer-to-peer (P2P) payment apps are growing in number and they're becoming more widely adopted by merchants and users alike. Here, we take a look at one titan in the industry: Cash App. This app was born of financial tech company Square Inc. to enable easy P2P transactions and more.
You may be thinking, "Isn't that the same thing as Venmo?" Or, for that matter, PayPal, Google Pay, Apple Pay, Zelle—indeed, the list of P2P payment apps available today is both long and competitive. With nearly 30% of P2P mobile payment users in the U.S. using Cash App, according to market research firm eMarketer, Cash App's features and functions have seemingly helped set it apart from other apps. Cash App is still playing catch-up to Venmo and Zelle, however, which both capture a higher share of the market.
How Does Cash App Work?
Like many P2P payment apps, Cash App aims to simplify and enhance mobile payments. To get started, download the app to your mobile device or sign up on a web browser. You'll need to link your bank-linked debit card.
Once you have the app downloaded, you'll choose a unique $cashtag username for others to find you with (you can also search for users by phone number or email). To start paying with Cash App, add to your account balance by connecting your bank account or debit card.
After you're set up, you can send or receive money. To send money to another user, tap the $ symbol in the app and select your payment's purpose and recipient. Don't breeze through this part of the process, though-you likely won't see those funds again if you accidentally send money to the wrong person.
Cash App users gain access to the accompanying Cash Card that allows you to instantly connect to your balance to make purchases. This free, Visa-powered debit card can be used with merchants like a traditional debit card or added to your mobile wallet for digital payments. If you're so inclined, you can customize the card with your own designs and inscriptions. With a parent's permission, users as young as 13 can get a Cash Card, making it a great option for starter cards to help kids learn about money management.
Pros and Cons of Using Cash App
Let's take a look at some of the app's stand-out features, and what's great—and less great—about each.
- Cash App and the accompanying Cash Card are free to use.
- Cash App offers commission-free investing, similar to brokerage apps like Robinhood.
- Investment options include buying and selling Bitcoin directly on the app. Plus, you can send and receive Bitcoin with your $cashtag.
- You can use your Cash Card to make ATM withdrawals.
- When you spend with your Cash Card, you can swap out different "boosts" to receive instant cash back on purchases like dining and retail.
- Though you can make a standard deposit to your bank for free, which takes one to three business days, instant deposits will cost you a fee of 1.5% with a minimum fee of $0.25.
- Using a linked credit card to send payments costs you 3%.
- Unlike some competitors, Cash App doesn't offer options trading or IRA investments.
- Bitcoin is the only cryptocurrency available to trade on the app, and transactions are subject to fees.
- ATM fees are reimbursed by Cash App, but only for users who get at least $300 directly deposited into their Cash App every month.
Is Cash App Safe?
Keeping your money safe is a priority for everyone. Cash App offers several security features to safeguard users across all of the platforms functions:
- Data encryption helps safeguard your vital information, like banking details, even when you're on public Wi-Fi.
- Notifications alert you every time your account is utilized.
- Bitcoin storage is secured on Cash App's offline system.
- Personal verification options include biometrics and a personal PIN to help make sure only you can access your account.
- Your Cash Card can be paused if it's stolen or misplaced to prevent others from swiping without your permission.
- A one-time sign in code is sent to you every time you log in.
- A Security Lock feature can be enabled so every transaction on your Cash App requires your passcode.
- Two-factor authentication adds an extra safety layer to account access.
Regardless of Cash App's safeguards, always beware of fraudsters trying to pry into your account. If you do suspect a scam, report it to Cash App's support team through the app. Unlike traditional bank accounts, balances stored with Cash App aren't covered by FDIC insurance, which is important to consider.
The Bottom Line
Cash App describes itself as "the easiest way to send, spend, bank and invest." While it may be among the easiest methods to accomplish the aforementioned tasks, it's not necessarily the best of the best, if only because so many other apps exist that may better suit your needs for each endeavor. However, the creators of Cash App are undoubtedly providing a competitive option in the world of P2P payment and investment apps, whether you're repaying a friend or dipping your toes in the stock market.