These days, there are services from tech companies that have made sending and receiving money easier. The rate at which people sign up for these services shows that they are comfortable with their cashless features.
Cash App is a payment app, howbeit peer to peer. It allows you to request money, send receive money. It was developed by Square Inc and launched in 2013. Cash App now has more than 24million active users.
In traditional bank accounts, users receive account numbers, but here on Cash App, you are not identified with an account number. You’ll be recognized with your email address and phone number. If you don’t want to use those (email address and phone number) as identifiers, you can create a $Cashtag. The $Cashtag cannot be longer than 20 characters. It must include at least one letter and also be unique to you. The moment you create a $Cashtag, you get a shareable URL that your customers or friends can use to make payments to you.
To send a payment through Cash App, you will open the cash app mobile app. Afterward, you’ll press the amount of money you want to transfer. Enter your email address, phone number, or $Cashtag. After which, you will write in a description and then tap the “PAY” button. You can view the details of a received payment by tapping the activity button. The “MY CASH” button is used for checking money deposited in your Cash App account.
Advantages of Cash App
Cash App has numerous benefits. The following are some of the advantages of Cash App:
- Cash App allows users to buy and sell Bitcoin.
- It allows users to purchase stocks in specified companies as much as they want to invest. If you want to buy stocks and you don’t have enough money in your Cash App account, the remaining balance will be deducted from your linked bank account.
- Another benefit is that you can receive a $5 cash bonus as a referral bonus. A referral bonus is obtained by sharing your referral link with people. The moment they sign up to Cash App using your link, you get a referral bonus.
- Cash App comes with a free debit card, although it’s optional. Sutton Bank issues the card. It’s peculiar to a person’s Cash App account. This card enables users to withdraw money from their Cash App account.
- Cash App does not charge fees on basic services like sending or receiving money. They also do not charge monthly fees.
- You can borrow money, but this feature is not fully available. Everyone can get money from $20 to $200. This option will be working like in other borrowing apps: Earnin and Dave.
Disadvantages of Cash App
In as much as there are benefits or advantages, there has to be an iota of disadvantage. Some of them will be discussed in the paragraphs below.
- One disadvantage is that if you plan on using a credit card to send money, you will be charged a 3% fee.
- Cash App charges fees for instant deposits. A 1.5% fee will be charged with a minimum of 25 cents on instant deposits.
- Cash App charges fees on buying and selling Bitcoin. It charges two types of fees. One is an additional fee determined by price volatility across US exchanges. The other is a service fee on transactions depending on market activity.
- There’s a clear difference between the Cash App and traditional banks. Funds are not federally insured because funds in Cash App are not FDIC insured. Traditional banks usually have FDIC insurance. FDIC insurance would mean that if the bank were to liquidate, funds would be federally insured. The funds insured are up to $250,000. One observation is that cash cards are issued by Sutton Bank, which is FDIC insured. The clarification to the observation is that customers’ funds in Cash App are never held with or transferred to Sutton Bank. So the FDIC insurance doesn’t cover Cash App’s customer funds.
- One other downside is that there are spending limits on cash cards. The maximum amount you can spend on your cash card is $7000 per day, $10,000 per week, and $25,000 per month.
- Another disadvantage is that there are withdrawal limits on credit cards. The maximum amount that can be withdrawn from the ATM is $1000 per day and $1000 per week.
How does Cash App Compare With Paypal?
Unlike Cash App, PayPal has been around for about 20 years. We will dive Right into their similarities and differences right away.
The difference between Cash App and PayPal regarding sending money is that Cash App can only send to users on the same App. In contrast, PayPal can send money to any email address or phone number.
There’s also a difference between both apps concerning requesting money. Cash App users can only request from users on Cash App, while a PayPal user can request from any email or phone number.
Regarding refunding money, both apps have an easy refund process. The only difference is that PayPal cannot refund friends and family payments.
While connecting to your bank on PayPal, you cannot use the same bank account on two different PayPal accounts. PayPal won’t also allow prepaid cards or online-only banking.
If you wish to withdraw money from Cash App, there are two ways. It’s either you withdraw instantly or with 1-3 days. There’s a fee to be charged for instant withdrawal, but waiting 1-3 days is free. While withdrawal on PayPal takes 1-7 working days, depending on the user’s bank.
Cash App is an excellent app to download. It offers plenty of services such as making payments, receiving money, investing in stocks and Bitcoin, and they require low fees.
It’s good for personal use. But for large businesses, you can use PayPal because it offers safety features.